12 Aug 2016
Songwon Industrial Group Releases Financial Results for Q2/2016
- Sales in Q2 totaled 179,071 Mil. KRW
- Gross profit amounted to 47,988 Mil. KRW
- The gross profit margin is at 26.8%
- EBITDA increased to 20.0%
Ulsan, Korea – August 12, 2016 – Today, Songwon Industrial Group (www.songwon.com) released its financial results for Q2. The Group announced sales of 179,071 Mil. KRW and a gross profit margin of 26.8% for Q2 - an increase of 6.7 percentage points compared to Q2/2015. For the first half of the year, the Group realized consolidated sales of 362,145 and generated a gross profit of 99,173 – a 76.8% increase compared to the first 6 months of 2015.
Songwon’s business delivered according to expectations during the first half year 2016, and from a volume perspective, the company saw a double digit increase. Revenues grew stronger due to the generally stable prices combined with a weak KRW, and Songwon expects the positive current market demand to continue.
After successfully negotiating several key contracts globally, Songwon was able to maintain the current price level in general. Even though interpreting competitive trends proved difficult, the organization has focused on achieving acceptable profitability during the first half of 2016, rather than pursuing additional volume growth.
The European recovery that continued on low level throughout the quarter was negatively influenced by the slowdown in China and subsequent negative developments in the other markets in Asia. The overall situation in Asia and the USA remains very competitive with pressure on prices. However, Songwon expects additional business to come from Iran now that the embargo has been lifted. Despite raw materials remaining historically low in Q2, Songwon foresees a slight increase to occur in the coming months. However, the company acknowledges that it might be difficult to reflect this in the selling prices at the same point in time.
All of Songwon’s manufacturing facilities ran steadily at high capacity without disruption throughout Q2/2016, including its new plant in Abu Dhabi. Construction of Songwon’s JV plant for OPS (One Pack Systems) in Qingdao, China is also on schedule as planned. The production stability combined with the lower raw material prices led to EBITDA and EBIT margin improvements of 19.2% and 14.3% respectively during the first half year 2016.
The result of the Brexit referendum vote in June created massive uncertainties with regard to the economic implications. It seems likely that there will be increased volatility in the financial markets and decreased confidence levels within the Eurozone in the short term, with the growth outlook for the rest of the year now appearing weaker. While remaining cautiously optimistic, Songwon will be closely monitoring the impact of Brexit. However, the management is confident that the organization is well-positioned for the future and they will continue implementing the actions in line with the Songwon strategy to further build the foundations for sustainable growth and improved profitability.
The Q2 Report can be downloaded at: www.songwon.com/en/investors/financialresults.
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About Songwon Industrial Co., Ltd.
Songwon Industrial Co., Ltd. is the 2nd largest manufacturer of polymer stabilizers in the world with an almost 50 year history of breakthrough solutions. A leader in the development and production of additives and specialty chemicals, Songwon provides added-value products and innovative solutions to the plastics industry.
The company’s extensive product portfolio includes polymer stabilizers, alkyl phenols and alkyl cresols, PVC stabilizers, plasticizers, tin intermediates, polyurethanes, SAP and flocculants.
With headquarters in Ulsan, Korea, the Songwon Industrial Group comprises 16 companies including 2 joint ventures and 2 representative offices, located in 10 different countries on 3 continents. Songwon's products are manufactured across the globe in 9 manufacturing facilities: 3 are located in Korea and the others in Germany, USA, India and UAE plus 2 JV plants in China, one currently under construction and due for completion in 2016. The company also has a worldwide network sales and customer service offices, logistics hubs and warehouses.
For further information, please go to: www.songwon.com.