SKC’s 11th Consecutive Quarterly Loss Signals Tough Road Ahead Even in 2025

[Korea Financial Times, Gwak Horyung] SKC (CEO Park Won-chul) reported second-quarter sales of KRW 467.3 billion and an operating loss of KRW 70.2 billion on July 30. While sales improved 3.1% year-on-year, operating losses widened by 13.8%, marking the 11th consecutive quarterly loss for the company. The operating loss exceeded the earlier market estimate of KRW 55 billion.

The main factor in the poor performance was the further deterioration of the secondary battery materials business (SK Nexilis). Despite a sharp increase in North American sales, which drove secondary battery materials revenue up 156% year-on-year to KRW 127.3 billion in the quarter, the segment’s operating loss grew slightly to KRW 38.1 billion. Profitability was weighed down by low yields at the company’s Malaysian plant, which is still in its early ramp-up phase.

The chemicals arm also failed to recover, posting KRW 275.3 billion in sales and an operating loss of KRW 16.1 billion, both up 13% and 204% respectively versus a year earlier. The semiconductor materials division remained stable, reporting KRW 60.6 billion in sales and an operating profit of KRW 14.4 billion.

Looking ahead, SKC does not expect a turnaround in the second half of the year. “Given the structural difficulties in the chemical business and large-scale capital requirements for new initiatives such as semiconductor glass substrates, a dramatic improvement in earnings this year is unlikely,” the company said.

The recent issuance of KRW 260 billion in perpetual exchangeable bonds, secured using treasury shares, was aimed at easing financial burdens at a time when profits from core businesses are insufficient. Despite the challenging environment, the company remains committed to accelerating new investments and overhauling its business portfolio.

Chief Financial Officer Yoo Ji-han stated, “Most of the KRW 260 billion in new liquidity will be used as working capital for the commercialization of glass substrates.”

In June, SK Nexilis, leveraging a partial stake in its Malaysian subsidiary, also secured a KRW 150 billion investment from Toyota Tsusho in Japan. “SK Nexilis copper foil will be supplied to Toyota’s own battery plant under construction in North Carolina, USA,” Yoo added. “This partnership is highly significant in terms of expanding our presence in the North American market and alleviating financial pressures on the business.”
Gwak Horyung (horr@fntimes.com)