SKC : Reports First-Quarter 2023 Financial Results

A turnaround in the EV battery materials and chemicals business expected in Q2 ··· continued investment in future growth drivers including chip glass substrate

·​ Enhancing ESG management practices by considering adoption of an internal carbon pricing system and strengthening expertise and diversity in BoD membership

SKC (CEO & President Woncheol Park) announced on May 4 that the company posted 669.1 billion won in revenue and 21.7 billion won in operating loss in the 1st quarter of this year. Despite dwindling profits on the account of the worsening business landscape both at home and abroad, SKC vows to press ahead with investments in future growth drivers and ensure a rebound in the 2nd quarter in the wake of investment initiatives in its flagship businesses.

Witnessed by management executives including CEO Lim Eui-joon of SK picglobal, CEO Lee Jae-hong of SK nexilis, Choi Doo-hwan, CEO of SK pucore and CFO of SKC, CEO Kim Jong-woo of SK enpulse, Choi Kap-ryong, Head of SKC's ESG Management Division, and Shin Jeong-hwan, Head of SKC's Business Development Division, SKC announced the Q1 2023 financial results in its head office in Jongro-gu, Seoul. The business data announcement was also streamed on YouTube.

In terms of financial results breakdown by business line, the EV battery material business headed by copper foil manufacturer SK nexilis raked in 180.4 billion won in revenue and 300 million won in operating profit. In the face of sluggish market demand, the sales figure climbed up when compared with the previous quarter, with both sales volume and revenue expected to increase concurrently thanks to market demand expected to rebound from the 2nd quarter primarily in North America and Europe. SK nexilis is building a full-scale growth drive platform by expanding its global production capacity in Malaysia and Poland. In particular, the company will be able to secure excellent cost competitiveness when its Malaysian plant kicks off commercial operation in the 2nd annual half.

The chemicals business spearheaded by SK picglobal and SK pucore posted 393.3 billion won in revenue and 6 billion won in operating loss. Although their mainstay products including propylene oxide (PO) and propylene glycol (PG) continued to suffer a market price decline, the companies drastically curtailed losses in comparison with the previous quarter. They are incrementally improving sales and profitability by expanding sales from the 2nd quarter in major markets including North America and Asia.

The semiconductor materials business centered around SK enpulse recorded 87.5 billion won in revenue and 7.9 billion won in operating income. The sales figure declined in arithmetic terms from the previous year as sales revenue standards for PCB business changed, but profitability improved. On top of that, as the CMP pad and blank mask businesses took on a full-blown growth trajectory despite a global slump in the chipmaking industry, operating profit jumped 60% when compared with the same period of last year. As requests for evaluation of high-value products arrive one after another, SK enpulse plans to accelerate its drive to expand its customer base this year.

Turning crisis into opportunity, SKC is working hard on future growth drivers including semiconductor glass substrate and silicone anode materials. The company is building a glass substrate production plan which is now over 30% complete and scheduled to go live on a commercial scale in the 2nd half of next year. The silicon anode material business will see investments in pilot production sometime in the 2nd quarter prior to full-scale commercial production. SKC is also planning to break the ground for an eco-friendly biodegradable material production plant this year, with commercial production slated for 2025.

The company also continues to step up its ESG drive. By establishing its ESG-based investment process this February, SKC is laying ground for full-fledged adoption of the internal carbon pricing system in the 2nd half of this year by preparing in-house training programs. In March, the company had its anti-corruption management system certified with ISO 37001 to enhance transparency into management practices. Furthermore, more female outside directors were appointed to the Board of Directors (BoD) to raise the share of female outside directors to 50%. The BoD performance management system was overhauled to further enhance expertise and diversity in the BoD membership.

"Closing the sale of the film business which marked the origin of the company last year, SKC is building a platform for full-fledged growth as a 'global ESG material solution provider'," said an official at SKC. "We will push ahead with strong innovation drive against the worsening business landscape to rapidly turn around our business performance and step onto a growth trajectory." [End]