Korea’s major chemical makers are expected to report weaker than previously forecast earnings for the fourth quarter of last year as reduced demand from Europe and China hurt their bottom lines, industry sources said Wednesday.
LG Chem Ltd., the country’s top chemical maker, is estimated to have racked up an operating income of 532 billion won ($465 million) in the fourth quarter, down 25.7 percent from the previous quarter. Its fourth-quarter sales are projected to have declined 3.6 percent to 5.89 trillion won over the cited period, according to the sources.
OCI Co., Korea’s leading manufacturer of polysilicon, is also expected to report a 52.3 percent on-quarter drop in its fourth-quarter operating income to 121 billion won, with its sales expected to have fallen 6.1 percent to 1 trillion won.
Honam Petrochemical Corp., South Korea’s second-biggest ethylene producer, is forecast to post an operating income of 200 billion won for the fourth quarter, compared with an operating income of 394 billion won seen during the previous quarter.
“Due to a decline in prices of chemical goods and weak demand, local chemical makers suffered a drop in their fourth-quarter bottom lines,” said Choe Ji-hwan, an analyst at NH Investment & Securities.
Experts said local chemical makers are likely to see their business performance improve in the first quarter of the year, however, since the petrochemical industry usually enjoys a boom in the January-March period.
“The first quarter is usually a peak season for the sector, and overseas demand is likely to improve, although there are concerns that the European crisis is showing signs of spreading into other regions,” Choe said.
(Yonhap News)
