Korea Zinc Company (010130) Q3 2024 earnings summary

Executive summary

• Consolidated sales reached 3,207 bn KRW in 3Q24, up 4.9% QoQ and 39.8% YoY, driven by higher precious metal prices and increased sales volume.

• Revenue for the first nine months of 2024 was ₩8.64 trillion, down 11% year-over-year, with operating profit at ₩603.2 billion, a 30% decrease from the prior year.

• Net profit was 153 bn KRW in 3Q24, a decrease of 22 bn KRW QoQ but up 75 bn KRW YoY; net income attributable to controlling interests was ₩439.8 billion, down 17% YoY.

• The company maintained a strong cash position, with cash and cash equivalents at ₩1.51 trillion as of September 30, 2024.

Financial highlights

• Gross profit for 3Q24 was 270 bn KRW, down 92 bn KRW QoQ but up 43 bn KRW YoY; gross margin for the period was 10.3%, down from 13.2% in the prior year.

• EBITDA stood at 314 bn KRW in 3Q24, nearly flat QoQ but up 125 bn KRW YoY; for the period, EBITDA was ₩892.8 billion, down from ₩1.13 trillion YoY.

• EPS for the nine months was ₩21,368, compared to ₩26,139 in the previous year.

• Dividend payout policy maintained at 30% or more of separate net income, with interim dividend of ₩10,000 per share in August 2024.

• Total assets reached ₩13.64 trillion, with total equity of ₩9.43 trillion.

Outlook and guidance

• Excluding one-off maintenance costs, profitability is expected to improve in 4Q24 with rising metal prices.

• Lead sales volume is projected to increase due to high seasonality.

• Revenue is expected to rise further if interest rates are cut.

• The company reaffirmed its commitment to shareholder returns, targeting over ₩4 trillion in dividends and share buybacks over the next decade.

• Market conditions remain challenging due to global economic slowdown, but long-term demand for non-ferrous metals is expected to recover.