Songwon Industrial Group achieves steady progress with solid results for the third quarter 2013
- Solid financial results for Q3 contribute to the steady progress made by Songwon during 2013
- Strong growth in core Polymer Stabilizers business with sales increasing by 9.3% YTD 2013 compared to 2012
- Gross profit margin adjusted for idle capacity variances slightly increased from 17.6% to 18.3% YTD, driven by planned productivity improvements
- YTD EBIT Margin increases from 6.0% to 6.9% compared to prior year
Ulsan, Korea – November 26, 2013 – Songwon Industrial Group is pleased to announce steady progress with improved results for Q3 and the first nine months of 2013. Sales revenues in Q3 2013 of Mil. KRW 175,800 represent an increase of 0.8% in comparison to the same period in 2012. The detailed Q3 2013 financial results report, which is compliant with Korean International Financial Reporting Standards (“K-IFRS”), can be downloaded at: www.songwon.com/en/investors/financialresults.
Hans-Peter Wüest, Chief Financial Officer and Member of the Songwon Industrial Group Executive Committee, stated: “We continue to make steady progress despite the continued uncertainty in the market as well as sporadic signals of economic recovery. Revenues increased by 1.6% Q3 2013 over Q2 2013. Polymer Stabilizers, our core business, is on track with growing sales quarter over quarter as well as YTD 2013 vs. YTD 2012 (+9.3%).
Gross profits were subject to changes in calculation of idle capacity variances starting January 1, 2013. As a result this has led to a decrease in margin, however, when adjusted for idle capacity variances, gross profit margin shows an increase from 17.6% to 18.3% for the first nine months of 2013 compared to the same period in 2012, reflecting achieved productivity improvements. YTD net profit grew by 0.5% and the YTD EBIT margin is up from 6.0 to 6.9%.”
Jongho Park, Chairman, CEO and Head of the Songwon Industrial Group Executive Committee, said: “This has been a tough quarter but, once again, we have continued to demonstrate our growth potential. We have been able to offset softening selling prices with raw material prices following the same trend, however we do not expect this to continue as economies start to rebound. Our order book for Q4 2013 is robust, though less strong than in Q3 2013. Upstream polymer production continues to strengthen and this drives our volume Antioxidant business. The new OPS production site in Houston, USA, is up and running; initial contracts are committed and first orders have been shipped. A new extrusion technology has been added in our Greiz, Germany, OPS facility, and this technology opens up a new era of optimizing production, planning and scheduling.
The result of the new extruders will be an extended product range, increased output and better quality for specific product categories. Our sales of Light Stabilizers continue to grow as a result of the focus and momentum created with the Sabo collaboration. The focus on the UV market has also driven growth in our UV Absorber business. Our Thioesester business continues with strong regional sales programs to drive and support solid growth. Manufacturing continues to deliver positive results based on our productivity initiatives in Ulsan and Maeam and the projects slated for implementation into 2014 will lead to additional cost relief in 2014.
With the successful completion of the DOTO expansion and the last customer approvals to be finalized, Tin Intermediate sales will improve in Q4 2013. PVC is expected to continue steadily and our team is focused on growing the mixed metal stabilizer position in Korea. This will lead to growth in the Q4 2013 and continued growth in the next years. Our decision to discontinue PTBP and BP as well as Aminic AOs, will start to impact Q4 2013 top and bottom line results. We are well positioned to implement our plans running into 2014 and capitalize our growth potential as both markets and economies show recovery.”