SKC Reports Operating Profit of 190.8 Billion KRW Last Year, Up 36.5% YoY

Operating Profit Target for This Year: 250 to 300 Billion KRW

[Asia Economy Reporter Hwang Yoon-joo] SKC announced on the 9th that its operating profit last year reached 190.8 billion KRW, a 36.5% increase compared to the previous year. During the same period, sales rose 14.5% to 2.7022 trillion KRW. Despite the impact of COVID-19, the company achieved improved performance by recording profits in all business sectors. This year, SKC plans to expand its ESG activities, marking the first year of safety, social, and governance (ESG) management.

On the 9th, SKC held a press conference at its headquarters in Jongno-gu, Seoul, attended by key executives, where it announced its 2020 business performance and set a target to achieve operating profits of approximately 250 to 300 billion KRW in 2021.

Throughout last year, SKC continuously innovated its business model. In January, it entered the copper foil business for secondary batteries, transforming into a secondary battery materials company. In February, it spun off its chemical business to lay the foundation for global growth. It also sold its stakes in SKC Kolon PI and SK Bioland, where business model innovation synergies were limited. In December, SKC fully acquired SKC Solmix as a 100% subsidiary and integrated semiconductor-related businesses to prepare for accelerated growth.

As a result of business model innovation, SKC recorded profits in all its businesses last year. SK Nexilis, an investee company manufacturing copper foil for electric vehicle batteries, posted sales of 371.1 billion KRW and operating profit of 52.9 billion KRW despite reduced operating rates due to early-year strikes and COVID-19 impacts. This was driven by early operation of the 4th plant and sales growth in the European and Chinese electric vehicle markets. With the commercial operation of the 5th plant starting this year, performance is expected to improve further. Currently, SK Nexilis is maintaining full operation to resolve supply shortages.

SK PIC Global, a global joint venture in the chemical business, achieved sales of 699.1 billion KRW and operating profit of 88.2 billion KRW. Although sales and operating profit slightly decreased due to regular maintenance in the fourth quarter, strong sales of propylene oxide (PO) and propylene glycol (PG) led to significant operating profits. In 2021, steady demand is expected to continue, with both PO and PG showing favorable trends. SK PIC Global plans to continuously expand its customer base for high value-added products focused on personal hygiene.

The Industrial Materials Business Division recorded sales of 992.9 billion KRW and operating profit of 63.1 billion KRW in 2020. While sales slightly increased compared to the previous year, operating profit nearly doubled. This positive outcome was driven by an increased proportion of high-quality differentiated products such as flexible OLED protective films and improved performance of overseas subsidiaries. This year, the Industrial Materials Business Division will continue its growth by expanding technology-centered advanced IT and eco-friendly businesses.

The Semiconductor Materials Business Division posted sales of 395.3 billion KRW and operating profit of 17.4 billion KRW, turning profitable. Improved performance was due to increased sales of high value-added products such as ceramic components and CMP pads. This year, better results are expected following the memory/foundry supercycle trend. In particular, profit margin improvement is anticipated to accelerate with the full-scale commercialization of the CMP pad plant in Cheonan.

This year, SKC will pursue four management policies to enhance corporate value. First, it will clarify its corporate identity (CI) to establish its presence as a secondary battery materials company. It will also accelerate business portfolio expansion and performance creation. Marking this year as the first year of ESG management, SKC will expand its activities. It has established detailed plans to implement RE100, which it joined as the first company in Korea, and will rapidly advance its eco-friendly pyrolysis oil business from waste plastics. Lastly, SKC will strengthen communication with financial society stakeholders such as customers, investors, and the market to enhance the execution of its financial story.

The dividend remains unchanged at 1,000 KRW per share from the previous year. An SKC official explained, "Despite the challenging external environment, we decided to maintain the dividend at 1,000 KRW, the same as last year, to uphold an active shareholder return policy."