Songwon Industrial second-quarter operating profit jumps 363 percent on strong demand

Songwon Industrial said Wednesday its second-quarter operating profit jumped 363.3 percent from a year earlier to 39.8 billion won ($27.8 million), driven by strong growth in both its industrial and functional chemical businesses.

Revenue rose 23.8 percent to 329 billion won ($230 million). The company cited a one-time benefit from changes to its long-term employee benefit plan in the first quarter as an additional factor in the overall profitability improvement.

"Profitability improved thanks to increased sales volumes and favorable pricing conditions, along with better operating performance in both business divisions," the company said in a statement. It noted that the escalation of conflicts in the Middle East boosted demand for polymer stabilizers, while raw material and logistics constraints contributed to higher sales volumes, prices, and margins.

Sales from the industrial chemicals division climbed 27.0 percent to 242 billion won ($170 million). The functional chemicals unit saw revenue grow 15.6 percent to 86 billion won ($60.1 million), aided by faster product approvals as PVC customers sought to diversify supply chains amid geopolitical uncertainty. For polyurethane products, the pass-through of raw material price hikes to selling prices and advance customer orders also supported the revenue increase.

Regionally, second-quarter sales increased by 32.0 percent in North and South America, 30.6 percent in other Asian nations, and 30.0 percent in the Middle East and Africa.

Looking ahead, Songwon Industrial expects the operating environment in the third quarter to remain similar to the second, based on current order patterns and market demand. However, the company warned that future outlooks remain uncertain due to potential shifts in geopolitical situations, supply chain disruptions, and customer inventory management decisions.