ULSAN, South Korea – SONGWON Industrial Group published its audited second-quarter and half-year financial results for the 2021 financial year. Over the quarter, the group achieved consolidated sales of 232,091 million KRW, marking a 17.1% increase in revenue over the same quarter of the previous year. Year-to-date (YTD), the group realized consolidated sales of 454,578 million KRW, representing an 11.2% rise over YTD June 2020 (408,688 million KRW), and recorded a net profit of 24,137 million KRW, delivering a 45.4% increase over the same reporting period in the previous year (YTD June 2020: 16,604 million KRW). In addition, the group’s gross profit margin achieved in the second quarter of 2021 was 22.5% and YTD 22.0%, reflecting an increase of 1.4%-points and 1.6%-points over the prior-year comparable period.
In the second quarter of 2021, Division Industrial Chemicals generated consolidated sales of 175,711 million KRW (Q2/2020: 152,636 million KRW) and for the first six months of the year achieved sales of 339,698 million KRW (YTD June 2020: 315,138 million KRW). When compared to Q2 and the first half-year of 2020, the result marks an increase in revenue of 15.1% and 7.8% respectively. SONGWON achieved the positive result on the back of high worldwide demand and also benefited in in the second quarter of 2021 from competitors’ force majeure events, which generated additional requests from both existing and new customers. Driven by the recovery in the lubricants market, SONGWON registered high demand particularly for its fuel and lubricant additives. As expected, the second quarter of the year was also strong for coatings due to the anticipated seasonality and the confirmation of the overall positive trend in the coatings industry. Following a solid start to the year, SONGWON Industrial Group observed the increase in demand and revenues throughout the first quarter continuing throughout the second quarter of 2021, leading to a robust business performance across its divisions with both achieving increases in revenues and profitability over the prior-year comparable quarter. The overall good result was, in part, supported by the divisions’ timely and imperative price increases, which proved effective in offsetting the rises in raw material costs and the higher freight shipping rates.
Division Performance Chemicals also performed strongly in the second quarter of 2021, recording a 23.9% increase in sales (56,380 million KRW) compared to the second quarter of 2020 (45,509 million KRW). In the first half-year 2021, the division achieved a 22.8% increase in revenue (114,880 million KRW) over the comparable reporting period in 2020 (YTD June 2020: 93,550 million KRW). Throughout the second quarter, Division Performance Chemicals was positively impacted by the stable global demand and its previously implemented price increases, which led to higher revenues for tin intermediates. Subsequently for PVC, margins remained similar to those observed in the first quarter of 2021, despite a weaker market for PVC in Korea and COVID-19 restrictions curbing the opportunities to seek new business. Demand started rising in the final month of the 2021 second quarter, as the price of certain raw materials began decreasing.
Looking towards the coming months, the group expects demand to remain strong supported by a recovering global economy. SONGWON also anticipates that the negative impacts to logistics and shipping caused by the COVID-19 pandemic will be ongoing for the rest of the year. In response, SONGWON will continue to concentrate on finding beneficial alternatives to ensure the reliable supply to customers with minimum disruption. At the same time, SONGWON will continue to remain cautious while maintaining its price levels and seeking to commercialize new opportunities to drive business growth. Based on its solid YTD results, the group is confident that, despite existing uncertainties, it can look positively towards a successful second half of the year.