Kumho’s profits jump 102.6% on booming exports

23 July 2007 12:08  [Source: ICIS news]

SINGAPORE (ICIS news)--South Korea’s Kumho Petrochemical posted a 102.6% rise in its second-quarter operating profits year on year to won (W) 46.6bn ($50.93m), owing to good export sales and a drop in feedstock costs, the company said on Monday.

 

Sales rose 15.8% to W535.8bn, from W462.7bn from the same period a year ago, while net profits were up 8.4% to W33.7bn, from W31.1bn.

 

The biggest hike in operating profits came from the synthetic rubber division, which were up 188% to W36bn, from W12.5bn in the second quarter of 2006, due to good sales from exports and a huge drop in main feedstock butadiene (BD) prices.

 

BD prices in Asia, according to the company report, had dropped sharply by $216/tonne to $893/tonne in June, compared to $1,109/tonne in February.

 

The tight demand and supply situation, together with strengthening natural rubber prices also supported the higher sales price of synthetic rubber, it said.

 

Kumho’s synthetic resins division also posted an operating profit of W200m, from an operating loss of W400m posted in the second quarter of 2006, despite constantly firm feedstock styrene monomer (SM) prices.

 

The spike was largely due to increased demand in the domestic and Chinese market with the onset of the peak season for electrical products such as air conditioners, it said.

 

Meanwhile, in terms of the third quarter, sales and operating profits for the synthetic rubber division were expected to rise steadily due to increased exports to South America and Europe on continuously weak feedstock BD prices, the company said. Replacement of natural rubber due to unsteady and rising costs would also increase demand for synthetic rubber, it added

 

($1 = W915.06)

By: Gina Myung
+65 6780 4359

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