KCC reports 1,208.6 percent jump in second-quarter net income

KCC reported net income of 2.84 trillion won for the April-through-June quarter, a 1,208.6 percent increase from the preceding three-month period, according to a consolidated financial-results filing dated Aug. 5.

That result was 217.8 percent higher than the 893 billion won in net income KCC recorded in the corresponding April-through-June quarter of the previous year, in consolidated results filed by KCC.

Net income in the immediately preceding reporting period, which ran from Jan. 1 through March 31, was 217 billion won in KCC's consolidated financial results reported in the filing.

Quarterly revenue reached 1.81 trillion won, increasing 12.2 percent from 1.61 trillion won recorded during the preceding three-month period from Jan. 1 through March 31 in KCC's consolidated results.

Revenue was also 7.2 percent higher than the 1.69 trillion won KCC reported during the corresponding April-through-June period of the previous year in its consolidated financial results.

Operating profit increased 37.6 percent from the previous quarter to 129 billion won, compared with 93.6 billion won for KCC's prior three-month reporting period in consolidated results.

On a year-on-year basis, however, quarterly operating profit was 13.1 percent lower than the 148 billion won recorded by KCC during April through June in the previous year.

Over the first six months, revenue totaled 3.42 trillion won, rising 4.6 percent from 3.27 trillion won in the corresponding period from Jan. 1 through June 30 last year.

First-half operating profit was 223 billion won, down 13.8 percent from 258 billion won in the matching period from Jan. 1 through June 30 of the previous year.

KCC describes itself as an integrated precision chemical company that produces building materials, paints, silicone and advanced materials across its core businesses, as stated in its company disclosures.

It divides its operations into building materials, paints, silicone and other segments, using these categories to distinguish the businesses in its financial disclosures and consolidated results reports.

The company's first-quarter data separately list consolidated sales for silicone, paints and building materials, the three operating segments for which sales figures were supplied in company disclosures for that reporting period.

Silicone was the largest of those three businesses by first-quarter sales, followed by paints and then building materials, based on the disclosed consolidated figures reported by KCC for that period.

KCC's paints business supplies architectural, automotive and marine coatings, with products used by the construction, automobile, shipbuilding and electronics industries, the company said in disclosures about the business segment.

Imported raw materials account for a high proportion of inputs in the paints business, leaving it affected by exchange rates, oil prices and conditions in industries it serves, KCC said.

The domestic building-materials market is oligopolistic, according to KCC, which identifies the market structure as part of the environment for its building-materials business in company disclosures.

The company also cites high barriers to entry tied to brands and distribution networks, two features of the building-materials market it serves in its domestic operations and disclosures.

KCC cited slow growth and weakening domestic consumption as factors creating demand uncertainty for its building-materials business, as described in the filing on domestic market conditions.

It also named the possibility of a slow housing-market recovery as a factor that could make demand uncertain for building materials in the domestic market, as reported by KCC.