The 2016 2nd quarter business performance figures included in this press release may in the audit and review conducted by the outside auditors as their audit or review has not yet been completed. As these figures are _ base_d on the K-IFRS consolidated financial statements, your understanding is solicited because they differ from the operating income amount previously disclosed, as they are now _ base_d on the operating income reflecting amendments concerning K-IFRS No. 1001 ‘Presentation of Financial Statements’.


⊙ Sales of ￦581.0 billion and operating income of ￦42.2 billion were posted in the 2nd quarter (7.3% operating income ratio) thanks to the stable growth of the company’s chemical business, its efforts to enhance the competitiveness of its film business, and the improved performance of its subsidiary companies. Net profit increased to ￦47.7 billion, representing a rise of 108.3% over the same period of the preceding year, thanks to gains from the sale of SKC Air Gas.

⊙ The 2nd quarter sales and operating income decreased by 5.8% and 26.5%, respectively, from the same period of the preceding year because the Polyol business founded in July 2015 was transferred to MCNS, and temporary expenses incurred by restructuring the film business were reflected in the figures.

⊙ SKC plans to innovatively reform its management infrastructure, restructure its core business lines, and secure growth potential in order to leap forward as a Global Major Specialty Materials Business.


[Chemical business]

ㅁ 2nd quarter sales of ￦198.8 billion, operating income of ￦32.8 billion, operating income ratio of 16.5%

- Despite the global business slowdown, SKC’s chemical line posted a sound operating income thanks to increased sales of propylene oxide (PO) _ base_d on the normal operation of key customers and increased sales of high value-added propylene glycol (PG) products to major global customers.

- Its profitability is forecast to continue improving with growing sales of high value PG products, while the favorable demand trend look set to continue thanks to the solid demand for PO in the latter half. The chemical line will aggressively implement the growth strategy for SKC’s chemical business _ base_d on the growing downstream demand for PO centering around PG and Polyol, and plans to strengthen the PU (polyurethane) specialty lines.


[Film business]

ㅁ 2nd quarter sales of ￦168.7 billion, operating income of △￦0.8 billion

- Solid demand for heat shrink and industrial film products was maintained despite the slow business from downstream mobile and display customers.

- Operating income of minus ￦0.8 billion was posted because ￦8 billion of temporary restructuring expenses were reflected in the figure _ base_d on the strategy to enhance the competitiveness of the film line. However, if the temporary expenses were included, the operating income would amount to ￦7.2 billion (4.3% ratio).

- The company plans to further accelerate its implementation of strategies aimed at enhancing the competitive advantage of its film line through the early launch of high value-added and highly functional future-oriented growth products in a bid to increase sales and profitability, including transparent PI film, TAC substitution film, and PVB.


[Subsidiaries]

ㅁ 2nd quarter sales of ￦213.5 billion, operating income of ￦10.2 billion, operating income ratio of 4.8%

- The company’s subsidiaries posted an aggregate operating income of over 10 billion won as the operating income of major subsidiaries continued to grow, including SKC Solmics, SK Bioland and SK Telesys, while two overseas film subsidiaries, SKC Jiangsu and SKC Inc., posted plus operating income.

- The company plans to concentrate on improving the profitability of its subsidiaries related to BHC(Beauty & Healthcare) and its semiconductor chip materials.

- In particular, SK Solmics is considering discontinuing its photovoltaic line, which has posted continual losses, in order to provide the momentum for growth into a ceramics technology leader and enhancing the competitiveness of its semiconductor chip materials line.

Note 1. Comparison of quarter performances _ base_d on consolidated financial statements
(Unit: 0.1 billion won, %) 

Note 2. Quarter performances by business line
(Unit: 0.1 billion won) 

Note 3. Key tasks in 2016 latter half 

Note 4. Concentrate on future growth film business products