Hanwha Chemical reports record Q2 profit

Hanwha Chemical, a unit of conglomerate Hanwha Group, on Thursday reported that operating profit in the second quarter grew more than threefold from last year, reaching a record-high quarterly result.

The chemical company posted 293.6 billion won ($267 million) in operating profit and 2.39 trillion won in revenue during the second quarter, largely on the back of its two major business pillars, petrochemicals and solar energy.

The petrochemicals business, in which the company sells basic materials for fiber, plastics and film, grew 135 percent year on year, posting 142.9 billion won in operating profit.

“The downward stabilization of production costs due to an international oil price drop and expanded sales of high value-added products such as ethylene vinyl acetate provided major lifts for company profits,” Hanwha Chemical said in a statement Thursday.

The solar energy business was another big contributor. The company began supplying solar modules to a unit of U.S.-based NextEra Energy, one of the world’s largest energy companies, after signing a contract last year to supply 1.5 gigawatts of solar modules.

In spite of the positive second-quarter results, the company’s shares closed at 26,100 won on Thursday, 1.14 percent lower from the previous trading day, on concerns that the company’s increased profit came from temporary favorable conditions in oil prices and solar equipment demand that might not last throughout the year.

“The second-quarter result was a surprise, especially with almost double the expected earnings on its solar businesses,” said Hwang Kyu-won, an analyst at Yuanta Securities.

“However, an oil price recovery and rapid drop in solar module prices are risk factors for the company that could affect its records through the third and fourth quarter this year.”

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]