• SKC experiences temporary slowdown amid weak demand in front-line industries due to COVID19 crisis and one-time expense in Q1.

• SKC plans to cope positively with uncertainty in Q2 with the focus on specialty materials, expects to see gradual improvement in performance.

SKC (CEO: Lee, Wan-jae) reported that it had posted sales of KRW 661.1 billion and an operating profit of KRW 27.4 billion for the 1st quarter of this year, representing an increase in sales of 57.1 billion won and a decrease in operating profit of 8.8 billion won compared to the 1st quarter of last year. In addition, the company recorded a net profit of KRW 86.1 billion, showing an increase of KRW 23.0 billion over the same period last year. However, the company experienced a temporary slowdown during the off-season amid weak demand in front-line industries due to the COVID19 crisis and a heavy one-off expense in the 1st quarter, but it expects to see the effects of BM innovation, including the takeover of the copper foil business, starting in the 2nd quarter.

SKC announced its performance results in the 1st quarter at a conference call held at its headquarters in Jongno-gu, Seoul in May. The session was attended by a number of top executives including Lee, Yong-sun, head of the Industrial Materials Business Division, Oh, Jun-rok, head of the Semiconductor Materials Business Division, Pi, Seong-hyeon, head of the Business Support Division, Kim, Yeong-tae, CEO of SK nexilis, and Won, Ki-don, CEO of SK picglobal.

SK nexilis, which produces copper foil for mobility batteries, posted sales of KRW 71.3 billion and an operating profit of KRW 6.7 billion in the 1st quarter of the year. The temporary slowdown in the result is attributable to a labor strike that lasted until the end of January. However, the production lines resumed normal operation in mid-February and record sales were posted in March. It is now expected that overall business operations will get back on track, starting in the 2nd quarter, when the new factory starts production.

SK picglobal, which produces PO (Propylene Oxide) and PG (Propylene Glycol), posted sales of KRW 188.4 billion and an operating profit of KRW 17.5 billion in the 1st quarter of the year. It was able to post such a stable result thanks to an increase in the demand for PG, which is used in the production of antiseptics, despite the COVID19 crisis and the heavy one-off expense associated with the launch of a joint venture. It is expected that the number of PG customers with high added value associated with antiseptics will increase in the 2nd quarter due to the continuing worldwide influence of COVID19.

The company’s Industrial Material Business, which produces high-value-added film materials, posted sales of KRW 255.7 billion and an operating profit of KRW 8.5 billion won in the 1st quarter of the year. The increase in both sales and operating profit over last year is attributable to an increase in both orders from customer businesses striving to secure raw materials and the sales of new products. It is expected that the overall operation of the business will see a positive result in the 2nd quarter amid the stabilization of raw material prices.

The company’s Semiconductor Material Business posted sales of KRW 83.6 billion and an operating profit of KRW 1.1 billion won in the 1st quarter of the year. The recovery in operating profit is mainly attributable to such factors as the stable sales growth of the CMP Pad and an increase in orders from ceramic parts customer businesses and their investment in the relevant facilities. It is expected that the business will continue to post stable sales in the 2nd quarter amid customer businesses’ continuing investment in ceramic parts.

Commenting on the announcement of the results for the 1st quarter, an SKC executive said, “We will strive to improve the business results in the 2nd quarter, with the focus on specialty materials, although COVID19 will continue to affect the situation. We will also continue promoting the BM innovation so as to be fully prepared for the future, primarily by strengthening the growth engine on the back of our achievements in the 1st quarter.”