Korea Ratings Downgrades SKC Credit Rating from 'A+/Negative' to 'A/Stable'

On June 20, Korea Ratings downgraded SKC's unsecured bond credit rating from 'A+/Negative' to 'A/Stable'. The company's commercial paper credit rating was also lowered from 'A2+' to 'A2'.

Korea Ratings cited several main reasons for this rating change: a weakening of profit-generating capability due to the simultaneous underperformance of SKC's core business divisions; an increase in financial burden resulting from continued large-scale investments; and the expectation that financial pressure will persist due to unfavorable industry conditions.

Korea Ratings expressed concern, stating, "Since the second half of 2023, the battery materials business has joined the chemical division in posting operating losses, resulting in two consecutive years of consolidated operating losses from 2023, and similar performance trends have continued through the first quarter of 2025."

Additionally, the agency noted that "despite additional inflows from business transfers and reduced investments in the battery materials division, the scale of financial burden reduction through operating cash flow remains limited, given the weakened profit-generating capability and the slow pace of recovery due to an unfavorable industry outlook." Korea Ratings also projected, "Over the medium to long term, SKC is expected to continue facing a high level of financial burden relative to its profit-generating capability."