aug. 2nd 2021
TRANSCRIPT
Q2 FY21 Business ResultsAug. 2nd 2021
Since this document has yet to be reviewed by external auditors,
please note that the figures in the document may be revised
following an independent review.
This document contains forward-looking statements or information
that are based on estimates and assumptions.
Please be advised that such forward-looking statements involve
known and unknown risks, uncertainties and assumptions,
and are subject to change.
The financial information in this document has been prepared
in accordance with K-IFRS.
Contents
Q2 FY21 Business Results01
Divisional Results Analysis
Investment Plan
CAPEX trend
① Quarterly Business Results
② Dividend Policy
③ Price Movement of Major Products
02
03
04
APPENDIX
(1) Income Statement (2) Financial Position
(1) Chemicals (2) Green Materials
Q2 FY21 Business Results (1) Income Statement
Sales and operating profit recorded KRW 421.7 billion and
KRW 53.9 billion respectively (OPM 12.8%)
- The highest quarterly revenues
(Bil. KRW) Q2 FY20 Q1 FY21 Q2 FY21 QoQ YoY
Sales 293.2 343.9 421.7 22.6% 43.8%
Gross Profit 57.7 59.7 79.4 33.0% 37.6%
Operating Profit 33.9 35.5 53.9 51.8% 59.0%
Pre-tax Income 86.4 49.4 144.3 192.1% 67.0%
Net Income 65.0 40.5 114.0 181.5% 75.4%
Oil Price(WTI, $/bbl) 27.85 57.84 66.07 14.2% 137.2%
Exchange Rate (₩/$) 1,221.30 1,113.41 1,121.33 0.7% ▲8.2%
330.2 324.7 329.6
349.9
293.2
316.7 303.7
343.9
421.7
52.2 51.4 48.4 51.0
33.9
25.9 28.5
35.5
53.9
0
20
40
60
80
100
120
140
150
200
250
300
350
400
450
Sales Operating Profit
4
Q2 FY19 Q3 Q4 Q1 FY20 Q2 Q3 Q4 Q1 FY21 Q2
(Bil. KRW)
[Consolidated basis]
[Consolidated basis]
(Bil. KRW) Dec. 2020 Mar. 2021 Jun. 2021Compared to
Dec. 2020
Asset 1,874.6 1,917.2 2,071.7 197.1
Cash and Equivalents 9.1 6.4 13.1 4.0
Liabilities 224.9 265.2 305.6 80.7
Shareholder’s Equity 1,649.7 1,652.0 1,766.1 116.4
Capital 129.0 129.0 129.0 -
Debt Ratio 13.6% 16.1% 17.3% 3.7%p
Capital Ratio 88.0% 86.2% 85.2% ▲2.8%p
5
Assets and liabilities stood at KRW 2,071.7 billion and
KRW 305.6 billion respectively at the end of June.
Q2 FY21 Business Results (2) Financial Position
[Consolidated sta]
Quarterly sales of the Chemicals
107.2 111.2 107.1 124.5 139.7
90.7 109.0
99.6
118.5
175.5
11.7 8.8
8.9
9.9
10.6
Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21
Chlorine Ammonia relatives Etc
QoQ
28.9%
215.6209.6
Q2 Results
Outlook for Q3
The Q2 sales of the Chemicals reached KRW 325.8 billion,
accounting for 77.3% of the total sales of the company. It is a 28.9% increase QoQ.
229.0
- Revenues and operating incomes increased driven by
the international price increase as affected by continued
constraint in supply and demand conditions for chlorine
products
- Operating incomes is expected to improve thanks to
the hike of international prices, a result of favorable
demand of market.
6
Divisional Results (1) Chemicals
(Bil. KRW)
※ The performance figure by business line above and the accumulated performance figure show a gap
attributable to the round-up of figures at the hundred of million position.
252.9
325.8
[Consolidated basis]
Sales
107.2 111.2 107.1
124.5
139.7
40
60
80
100
120
140
Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21
Cellulose
27%
Ammonia
Relatives
42%
Etc. 2%
ECH 17%
Caustic Soda 8%
Etc. 8%
Chlorine
33%
Sales stood at KRW 139.7 billion,
accounting for 33.1% of the total sales.
ECH
Caustic soda
- Revenues rose QoQ with a supply decrease due to troubles and
scheduled maintenance of major producers, and with strong
downstream businesses.
- Revenues rose YoY driven by selling price appreciation and
grown sales volume.
- Revenues rose QoQ with rising international prices and selling prices
enabled by the reduced regional supply, a result of scheduled
maintenance of major producers.
- Revenues rose YoY thanks to an increased sales volume.
7
Divisional Results (1) Chemicals : Chlorine
Sales Portion
(Bil. KRW)
[Consolidated basis]
Sales stood at KRW 175.5 billion,
accounting for 41.6% of the total sales.
Ammonia
EUROX ®
Chlorine
33%
Cellulose
23%
Etc. 2%
Ammonia 35%
EUROX® 4%Etc. 3%
AmmoniaRelatives
42%
90.7
109.0 99.6
118.5
175.5
30
50
70
90
110
130
150
170
190
Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21
- Revenues rose QoQ following increased international prices and
selling prices resulted from troubles experienced by major producers and
continued constraint in supply-demand conditions.
- Revenues rose YoY thanks to increased sales volume and upturn of
selling prices.
- Revenues rose QoQ as affected by an increased sales volume,
a seasonal peak in logistics.
- Sales rose YoY as affected by increased demands driven by AdBlue market
growth.
8
Divisional Results (1) Chemicals : Ammonia Relatives
Sales
Sales Portion
(Bil. KRW)
[Consolidated basis]
Quarterly sales of the Green Materials
The Q2 sales of Green materials division reached KRW 95.8billion,
accounting for 22.7% of the total sales of the company. It is a 5.2% increase QoQ.
52.5 60.9 61.9 63.8
67.7
31.1
26.8 26.2 27.3
28.1
Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21
Industrials Foods and Pharmaceuticals
QoQ
5.2%
88.183.6
87.7
- Operating income turned a downturn due to increased raw
material costs and logistics costs, while the revenues increased
thanks to improved industrial demands from global construction
economic recovery and by the increase of sale enabled
by the added lines of the company.
- Operating income is expected to decrease due to a continued
cost rise, although an expanded sale to meet additional
construction demand and a revenue increase are expected
as a result, based on the steady demand from overall
downstream businesses.
9
Divisional Results (2) Green Materials
(Bil. KRW)
※ The performance figure by business line above and the accumulated performance figure show a gap
attributable to the round-up of figures at the hundred of million position.
Q2 Results
Outlook for Q3
91.195.8
[Consolidated basis]
Sales stood at KRW 95.8 billion,
accounting for 22.7% of the total sales.
Industrials
(MECELLOSE® , HECELLOSE® )
Foods and Pharmaceuticals
(AnyCoat® , AnyAddy® )
52.560.9 61.9 63.8 67.7
31.126.8 26.2 27.3
28.1
20
40
60
80
100
Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21
Industrials Foods and Pharmaceuticals
Chlorine
33%
Ammonia
Relatives
42%
Etc. 2%
Industrials 16%
Foods and
Pharmaceuticals
7%
Cellulose
23%
- Revenues rose QoQ thanks to an increased sales volume with expanded
commercial production from added lines of MECELLOSE.
- Revenues rose YoY with a sales volume increase resulting from additional
lines, offsetting selling price falls, a result of the weakened exchange rate
compared to the previous year.
- Revenues rose QoQ with an increased sales volume supported by
commercial sale of the products from added lines and by growing
customer demand.
- Sales went down YoY with a selling price downturn due to the unfavorable
exchange rate. 10
Divisional Results (2) Green Materials : Cellulose
Sales
Sales Portion
(Bil. KRW)
(Industrials, Foods and Pharmaceuticals)
88.183.6
87.7 91.195.8
[Consolidated basis]
Investment Plan
ProjectInvestment cost
(Bil. KRW)Capacity (KMT) Mechanical Completion
HECELLOSE®
Expansion47.3 9
2018.2H
(Completion)
MECELLOSE®
Expansion33.6 7
2019.1H
(Completion)
MECELLOSE®
Expansion115.0 13.8
2021.1H
(Completion)
AnyCoat®
Expansion23.9 1.9
2021.1H
(Completion)
AnyCoat® /AnyAddy®
Expansion
(Inc. revamping for expanded
production of raw materials)
37.0 2 2022.1H
11
CAPEX Trend• Facility expansion and new investments made for profitability improvement after 2018.
• Expansion of green material business (MECELLOSE and Foods & Pharmaceuticals production line) and
investment in private equity investment JV in 2020.
• Additional line installation for Foods & Pharmaceuticals line and focused investment in ESG-related
environmental facilities in 2021.
12
Point
64.484.3
32.060.5
30.8 42.0 24.8 27.358.1 59.5
180.3
268.3
31.021.4
1.2
21.1 67.5 42.6
112.0 105.9
57.0
63.5
38.4
92.1
4.3
0.20.2
290.2301.7
416.1
101.4
174.0
36.363.1
92.470.1
460.3
165.4
1,431.2
1,314.1
1,210.5 1,161.9
1,110.7 1,159.5
1,371.7 1,311.3
1,263.6
-100
100
300
500
700
900
1100
1300
1500
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21(E)
Equity Investment
New Business & Capacity Expansion
Maintenance
Sales
(Bil. KRW)
① Quarterly Business ResultsAppendix
(Bil. KRW)
FY20 FY21
Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total
Sales 349.9 293.2 316.7 303.7 1,263.6 343.9 421.7 765.6
Gross Profit 74.9 57.7 49.8 51.6 234.1 59.7 79.4 139.1
Operating Profit 51.0 33.9 25.9 28.5 139.2 35.5 53.9 89.4
Income Before Tax 64.6 86.4 28.6 79.9 259.5 49.4 144.3 193.7
Net Income 43.1 65.0 24.1 66.6 198.8 40.5 114.0 154.5
Oil Price (WTI, $/bbl) 46.17 27.85 40.93 42.66 39.40 57.84 66.07 61.96
Exchange Rate (₩/$) 1,192.72 1,221.30 1,188.18 1,118.86 1,180.27 1,113.41 1,121.33 1,117.37
13
※ The difference between quarterly results and cumulative results is attributable to the round-off.
[Consolidated basis]
② Dividend PolicyAppendix
Dividend is decided with future investment and financial stability into consideration for dividend stability of
shareholders and corporate value increase.
650 650 650
300 300
500
300
800
1,700 1,700
1,500
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
14
Dividend
per Share(KRW)
Divident
Yield
Payout
Ratio
(Separate)
0.8% 1.1% 1.1%0.7% 0.9%
1.4% 1.0% 1.3%
4.1%3.7%
2.8%
19.4% 22.4%20.4%
108.6%
18.4% 28.8%
-23.1%
29.2% 25.1% 22.1% 23.8%
③ Price Movement of Major ProductsAppendix
(U$/MT) (U$/MT)
15
International price movement (Based on the posted prices of ICIS news)
-
1,000
2,000
3,000
4,000
5,000
6,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Spread ECH Epoxy Propylene
-
100
200
300
400
500
600
700
800
900
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Caustic Soda Ammonia