SONGWON Industrial Group reports stable sales in Q2/2014
Publishing date: 14.08.2014
SONGWON Industrial Group (www.songwon.com) today reported its audited results for Q2 achieving sales of 335,808 Million KRW for the first half of the year. Revenue has increased by 6.14% quarter over quarter when compared to sales of the previous quarter (Q1/2014: 162,899 Mil. KRW).
- Sales for Q2 with 172,909 Mil. KRW stable compared to 2013
- Gross profit of 23,927 Mil. KRW for Q2, a 25.6% shortfall compared to Q2/2013 due to increased production costs
- Strong recovery reported in U.S., Europe and Japan
- Expansion strategy continues with successful acquisition of SeQuent's specialty chemicals business in India
SONGWON’s Q2/2014 sales continue to run steadily and there has been a strong recovery especially in the U.S., Europe and Japan with results comparable to Q2/2013.
Despite strong competition, the extension of SONGWON’s leading position in Korea in polyurethanes and PVC is continuing. Customer demand is also increasing for Tin Intermediates and SONGWON continues to benefit from its investment in expanding into DOTO capacity.
In Q2/2014, Gross profit was 23,927 Mil. KRW – down -25.6% compared to Q2/2013 (32,168 Mil. KRW). The gross profit margin of 18.6% in Q2/2013 decreased to 13.8% in Q2/2014. However, the gross profit margin increased by 1.3% points compared to Q1/2014 (12.5%).
The gross profit margin decrease is the result of increased production costs and reduced output due to the technical issues that affected key production lines between the end of 2013 and Q1/2014. Strong competitive pressure and overall higher raw material prices also contributed to the lower gross profit in 2014.
SONGWON achieved another milestone in its expansion strategy with the successful acquisition of SeQuent’s specialty chemicals business in India. SONGWON now owns SeQuent's entire polymer stabilizer business, their production site in Panoli and the local R&D division. The company expects the Indian market to continue to grow at a high rate and the new addition to the business will enable SONGWON to develop a strong presence in this key country.
“Despite the challenging economic environment, we are pleased to see that Europe and the Rest of Asia are driving recovery. This demonstrates the strength of our strategy, as evidenced by the ongoing strong performance of Tin Intermediates and Polyester Diols,” says Hans-Peter Wüest, Chief Financial Officer and Member of the SONGWON Industrial Group Executive Committee. “While we remain cautious on the outlook for the rest of the year, the robustness of our portfolio reinforces our confidence that SONGWON’s strategic focus is the right one. We will continue to execute our strategy to enable us to develop identified opportunities to achieve stronger, more stable growth and profitability for SONGWON overall.”
The Q2 Report can be downloaded at: www.songwon.com/en/investors/financialresults.