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Hanwha Total profits in 2016 expected to hit record highs

Collected: 2017.01.25

Distributed: 2017.01.31

Source: Go Direct

South Korea’s Hanwha Total Petrochemical Co. is expected to report historic high profits for 2016 on a rise in the prices of Paraxylene (PX) and Styrene Monomer (SM), becoming the most profitable company in Hanwha Group in less than two years after it migrated from Samsung Group.

According to local brokerage houses and the chemical industry source Wednesday, Hanwha Total Petrochemical’s net profit for 2016 will likely have reached about 1 trillion won ($858.1 million), nearly doubled from 2015, and operating profit is expected to have surged 76 percent to 1.4 trillion won. If they are confirmed, both will be the record high annual profits not only for the chemical company but also for a unit of Hanwha Group since the group’s foundation in 1952. Sales are estimated at 8 trillion won, slightly down 3 percent over the same period.

Hanwha Group purchased majority stakes in four chemical and defense arms of Samsung Group including Hanwha Total Petrochemical - then Samsung Total Petrochemical - at combined 1.9 trillion won in November 2014 and completed the acquisition in May 2015.

Hanwha Total Petrochemical saw its profitability rise sharply thanks to the rise in prices of its mainstay products including Paraxylene (PX) - chemical essential used to produce plastic bottles - and Styrene Monomer (SM) - chemical ingredient used to manufacture Styrofoam. PX margin, the difference between the PX sales price and the price of raw material Naphtha, has steadily risen after hitting the lowest price of $306 per ton in 2014, adding to the firm’s profitability. Hanwha Total Petrochemical produces 170,000 tons of PX annually.

By Jung Wook

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