Kumho Petrochemical synthetic rubber earnings plunge in Q3

Seoul – Kumho Petrochemical has reported a sharp decline in third-quarter synthetic rubber earnings, due in part to raw-material costs and price competition.

Operating profit in the synthetic rubber division fell 92.6% year-on-year to KRW2.3 billion (€1.5 million) for the three months ended 30 Sept.

Sales, meanwhile, increased 23.8% to KRW782.4 billion, said the South Korean manufacturer in its third-quarter results 6 Nov.

The division's profitability was affected as "high-cost inventories caused a negative lag effect," following volatility in feedstock prices.

Increased competition in nitrile-butadiene (NB) latex, used in medical and industrial gloves, also weighed on earnings.

The company expects synthetic rubber profitability to improve in the fourth quarter as raw-material price volatility eases.

It also anticipates increased NB latex sales volumes and improved earnings, helped by higher operating rates among glove manufacturers.

Meanwhile, Kumho Petrochemical's EPDM and thermoplastic vulcanisate (TPV) business remained profitable.

The division reported third-quarter sales of KRW210.4 billion, up 20% year-on-year while operating profit rose 20% to KRW24.3 billion.

However, the company expects EPDM/TPV profitability to weaken slightly in the fourth quarter amid continued sluggish demand towards the year-end.