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Songwon Industrial Group has released its financial results for Q3 2023. During Q3 2023, the Group achieved consolidated sales of KRW247,867M, marking a decline in revenue over sales generated in the same quarter of the previous year (KRW350,731M). In Q3, Songwon reported a gross profit margin of 14.7%.
As anticipated, the global environment remained challenging in Q3 2023 and Songwon’s Divisions continued to face the headwinds already seen in the previous quarters. Amid the adverse macro and microeconomic conditions, Division Industrial Chemicals and Division Performance Chemicals reported a drop in revenue and volumes. In Q3 2023, Division Industrial Chemicals generated sales of KRW187,386M (Q3/2022: KRW256,289M) and YTD September 2023, KRW582,107M (YTD September 2022: KRW765,560M) and Division Performance Chemicals recorded sales of KRW60,481M (Q3/2022: KRW94,442M) and YTD September 2023, KRW202,159M (YTD September 2022: KRW266,339M).
For Division Industrial Chemicals, Q3 2023 was characterised by weak demand in the markets overall, increased supply availability and lower selling prices. Although Polymer Stabilisers registered lower revenues in Q3 2023 compared to Q3 in 2022, the business achieved a positive result due to price adjustments implemented at the end of 2022, newly acquired business and lower shipping costs. Towards the latter part of Q3, Songwon also observed improved demand for polymer stabilisers in some of its markets. In Q3 2023, Songwon’s Fuel and Lubricant Additives achieved volumes similar to those recorded in Q3 of 2022 and reported a slight increase in revenues despite the fall in the cost of raw materials between the 2nd and the 3rd quarters of 2023.
For Songwon’s Coatings, Q3 2023 was a challenging quarter marked by oversupply, subdued demand, volatile order patterns and highly competitive pricing but the business continued to win new customers and advanced its product development strategy.
In line with expectations, Division Performance Chemicals continued to face ongoing demand volatility and economic slowdowns in its key markets in Q3/2023. Tin Intermediates reported improved margins on the back of the higher price of tin, despite recording a fall in revenues and volumes resulting from weak demand overall, especially in the automotive industry. PVC recorded improved margins resulting from new business and a rise in sales in Korea despite the ongoing aggressive competition for volumes throughout the 3rd quarter of 2023. In Q3 2023, Solution Polyurethanes and Thermoplastic Polyurethanes was able to benefit from the stable price of raw materials despite continuing to be negatively impacted by low demand and the economic situation in South Korea.
Looking ahead to the fourth quarter, the challenging market environment and volatile geopolitical situation are expected to continue with demand remaining weak, order patterns unpredictable and prices volatile. To proactively address the challenging macro environment and ensure it maintains financial resilience, Songwon will continue executing its strategic objectives and leveraging its extensive industry expertise, global presence and diverse product portfolio. Going forward, the Group is confident that it is well-positioned to navigate both current and emerging challenges and strategically well-placed to capitalise on emerging opportunities.
The Q3 2023 report can be downloaded at: www.songwon.com/investors/reports-publications