KCC Paint Operating Profit 120.7 Billion KRW... 10% Increase
Noru and Samhwa Achieve Double-Digit Operating Profit Growth in First Half
The paint industry achieved solid results in the first half of the year despite the downturn in the construction market. This was due to business diversification and stabilization of raw material prices.
According to the paint industry on the 22nd, KCC's performance in the first half of this year recorded sales of 3.3671 trillion KRW and operating profit of 247.5 billion KRW, increasing by 6.8% and 49% respectively compared to the same period last year. Among these, the paint segment excluding silicone and building materials posted first-half sales of 940.9 billion KRW and operating profit of 120.7 billion KRW, up 9.4% and 10% respectively year-on-year.
In the first half, KCC's paint segment maintained relatively steady performance in the domestic market, supported by expanded sales and profits from overseas local subsidiaries. Orders for high value-added ship paints continued, and exports increased mainly for powder coatings, leading to overall growth in performance.
The paint segment is expected to continue growing in the second half. The company anticipates continued demand for automobiles and ships in the latter half, similar to the first half. To maximize profits, production efficiency improvements at each paint factory have also been undertaken. However, the economic downturn domestically and internationally, along with regional conflicts potentially disrupting raw material supply, are considered negative factors.
Noru Paint also improved its first-half performance. During this period, sales reached 402.4 billion KRW and operating profit 27.2 billion KRW, increasing by 2.2% and 14.1% respectively compared to the same period last year. Although new construction demand declined due to the construction market slump, Noru Paint offset this through relatively increased demand in the construction maintenance market such as apartment repainting. Especially, with frequent heatwaves and heavy rains this year, sales of waterproofing materials and heat-reflective paints increased, helping the second quarter results, which are usually a seasonal off-season, to perform well.
Samhwa Paint's operating profit exceeded 15 billion KRW for the first time in 10 years on a first-half basis. It achieved sales of 323 billion KRW and operating profit of 15.5 billion KRW in the first half, which are increases of 2.6% and 12.7% respectively compared to the previous year. This is the first time since 2014, when the operating profit was 23.5 billion KRW, that Samhwa Paint's first-half operating profit has surpassed 15 billion KRW.
Samhwa Paint stated that sales increased due to product diversification including architectural and industrial uses. They also explained that operating profit rose thanks to securing raw material supply stability through diversification of purchasing sources. According to Samhwa Paint's semi-annual report, prices of most major raw materials for paint such as pigments, solvents, additives, and resins have decreased compared to last year.
A paint industry official said, "Although there are concerns such as prolonged construction market downturn and raw material supply instability due to the Middle East war, we expect solid performance to continue in the second half. Each company is diversifying its business portfolio to enhance market competitiveness, and in September, the maintenance market will become active, providing a factor for sales growth."
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