By John Richardson EARNINGS estimates for South Korean petrochemicals companies for the full-year 2012 remain around 30 percent above where they should be because “most financial analysts remain in denial“, said an industry source. A sign of how bad the times have become was that LG Chem’s Q2 results, which were released last week, […]
Asian Chemical Connections
The H2 Recovery Story
By John Richardson THE majority of chemicals analysts have yet to wake up and smell the coffee, according to an industry observer. “South Korean stocks have come off by 15-30% since their big recovery in January, but it is only the timing rather than the overall sentiment that has changed,” said the observer. “The theory […]
Quick recovery forecast for South Korea
By Malini Hariharan Analysts are predicting a quick recovery for South Korean petrochemical companies after a dismal performance in the last quarter. Honam Petrochemical’s Q4 2011 sales were down 14.7% quarter on quarter at Won3,488 bn. Operating profit declined 59.8% to Won158.4bn. LG Chem’s sales dipped 4.8% at Won5,602bn while operating profit slipped 30% to […]
Weak margins hit earnings
By Malini Hariharan It is the results season and numbers posted so far confirm that the last quarter has been rough with depressed demand, weak product prices and firm feedstock costs affecting earnings. Siam Cement Group’s EBITDA for the chemicals division dropped 25% in Q4 from the previous quarter, while sales revenue declined by 5%. […]
Constant Search For Feedstock Advantage
By John Richardson AROUND $6bn worth of proposed petrochemical investments in Kazakhstan – the giant central Asian country with abundant oil and gas reserves – once again confirms the three most important factors for success: Feedstock, feedstock and feedstock. “The gas that will supply these projects is sufficiently advantaged to overcome major construction and logistics […]
Q2 setback for Korea
By Malini Hariharan The margin pain experienced in Asia in the last quarter is clearly evident in the recently released results by South Korean majors Honam Petrochemical and LG Chem. Honam’s operating profit for Q2 declined 36.8% from the previous quarter to Won36.1bn. LG Chem’s operating profit was down 7.2% at Won775.4bn while its petrochemical […]
Japan Disaster 2 – Refining, Petchems Update
By John Richardson OUR sympathies again go to the people of Japan. The main focus should be on providing as much support as possible to the rescue efforts and let’s hope that petrochemical companies globally step forward. But as we said yesterday, life goes on. The Japanese stock market was down around 5% this morning in early trading, […]
A dose of caution
By Malini Hariharan Predictions about a steady recovery in petrochemical margins from financial analysts have multiplied in recent weeks and producers too have turned bullish with many expecting to sail through 2011 without any major difficulties. But in the midst of this optimism a few cautionary voices can still be heard. Analysts at South Korea-based […]
LG Chem – Tried And Trusted Versus New Businesses
By John Richardson THE potential returns from LG Chem’s electric battery and electronic materials are tremendous and are leading to some bullish forecasts from analysts as to future earnings. What will be interesting, though, is what will be the main driver of profitability for the South Korean major over the next few years – […]
The perils of forecasting
By Malini Hariharan This is a tough time for those who are in the business of forecasting. Predictions of petrochemical margins hitting the bottom in 2009 have so far not materialised and volumes from new plants are being digested quite easily. “What’s happening? It is hard to understand the [market] situation; until when can you […]
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