SKC Records Q3 Sales of 462.3 Billion KRW and Operating Loss of 62 Billion KRW as Recovery in Battery and Chemical Sectors Remains Slow

On November 5, SKC announced that it recorded sales of 462.3 billion KRW and an operating loss of 62 billion KRW in the third quarter of this year. The continued difficulty in recovering the business environment for its major operations led to operating losses in both of its main revenue pillars: secondary battery materials and the chemical business. SKC is preparing for a rebound in performance from next year onward by strengthening competitiveness in each business segment.

Specifically, SK Nexilis, the company investing in copper foil for secondary batteries, is preparing for a full-fledged expansion of sales, as it is about to begin sales to a major customer in the Greater China region and sign mid- to long-term supply contracts with key clients. To this end, the company plans to significantly increase the operating rate of its Malaysian plant, thereby improving its cost structure.

In the chemical business, stable sales of its main product, propylene glycol (PG), have been maintained. Despite some profit reduction due to exchange rates and increased costs from higher maritime freight rates, robust expansion in industrial demand has allowed the company to sustain sales at full capacity levels.

In the semiconductor materials division, ISC, which operates the test socket business, has become a key driver, leading the division's performance for the second consecutive quarter. Sales for non-memory mass production, which have been promoted since the beginning of the year, continued to grow. Notably, sales related to artificial intelligence (AI) servers increased by 35% compared to the previous quarter, driving overall growth. Core products of SK Enpulse, such as CMP pads, also reached the break-even point.

Throughout this year, SKC has consistently pursued financial soundness as its top priority. By timely liquidating non-core assets, the company secured over 1 trillion KRW in cash, reduced borrowings, and significantly eased the financial burden on its subsidiaries. In particular, last September, SKC supported a 700 billion KRW paid-in capital increase for SK Nexilis, enabling the full repayment of acquisition financing. By the end of the year, the company expects its net borrowings to decrease by 300 billion KRW compared to the beginning of the year.

The Absolix glass substrate business is moving forward with the goal of mass production for customers next year. The plant, completed in the first half of this year, has now finished installing all equipment and is preparing to produce samples for customer certification. In addition, after securing subsidies under the U.S. Chips Act in May, the company expects to secure additional subsidies from the U.S. government within the year. SK Livio, an investment company in biodegradable materials, plans to begin visible mass production next year, based on its global production base currently being established in Hai Phong, Vietnam.

An SKC official stated, "We had anticipated a turnaround (return to profit) in the second half, but the business environment remains challenging. We will deeply reflect on ourselves and move forward with a renewed mindset, strengthening the fundamentals and competitiveness of our core businesses with a spirit of self-reflection and renewal (悔過自新)."