OCI Holdings Company (A010060) Q2 2024 earnings summary

Executive summary

• Q2 2024 consolidated revenue reached KRW 950 billion, up 9.8% sequentially, with operating income at KRW 90 billion and a 9.4% margin, but net income dropped 88.1% QoQ to KRW 23 billion.

• Revenue growth was driven by increased polysilicon sales from Malaysia and full consolidation of OCI earnings, while DCRE revenue declined.

• Operating income decreased 9.8% from the previous quarter due to underperformance in the U.S. module and urban development businesses.

• Completed transition to a holding company structure in 2023, focusing on investment, subsidiary management, and stable cash flow from dividends, consulting, and brand royalties.

• Major business segments include renewable energy, energy solutions, chemical materials, urban development, and other holding activities.

Financial highlights

• Q2-end assets totaled KRW 7.8 trillion, liabilities KRW 3 trillion, and equity KRW 4.8 trillion; H1 2024 consolidated revenue was ₩1,814.6 billion, down from ₩2,649.7 billion in 2023 H1.

• Operating profit for 2024 H1 was ₩188.8 billion, down from ₩531.2 billion in 2023 H1; net profit attributable to controlling interests was ₩191.5 billion.

• Operating margin declined to 9.4% in Q2; EBITDA increased 11.0% QoQ to KRW 146 billion, with EBITDA margin at 15.4%.

• Debt ratio improved to 51.9% in Q2 and 61.9% after partial debt repayment; net borrowing stood at KRW 217 billion.

• Cash and equivalents: ₩1,342.1 billion as of June 2024.

Outlook and guidance

• OCIM expects lower sales volume and reduced operating rates in Q3 due to U.S. AD/CVD investigation and scheduled maintenance.

• MSE's performance is expected to improve as U.S. residential solar demand recovers and tariff exemptions end.

• Plans to maintain at least 2023-level DPS through 2026 and execute share buybacks and cancellations totaling 5% of outstanding shares.

• Ongoing expansion in renewable energy and semiconductor materials, including new investments and joint ventures.

• Anticipates a resurgence in non-Chinese polysilicon demand by Q4 2024 or Q1 2025.