Investor Relations 2011

Transcription

1 Investor Relations 2011

2 Contents Company overview Product portfolio Sales breakdown Long term contracts Capacity expansion plan DNT Ammonium nitrate MNB Nitric acid Capex plan Green growth business Huchems in 2015 Future growth strategies Outlook of polyurethane 2011 earnings review Summary of historical P&L Appendix 2

3 Company overview Key takeaways Locations Company Huchems Fine Chemical Corp. Established Sep. 15, 2002 Spun off from Namhae Chemical Corp. Listed Oct. 7, 2002 CEO Mr. Jung, Kyong Duck Paid-in capital W40.9bn Number of employees Key products 216 Own products 86% Trade 13% CDM 1% <Plant site 1> <Plant site 2> Area: 340,000m 2 Area: 115,000m 2 Capacity: 1.1mMT/yr Plant 2 starting from

4 Product portfolio Largest nitric acid producer in Asia Specializes in precursors of polyurethane Vertically integrated from nitric acid to intermediates to isocyanates +Toluene DNT TDI Ammonia Nitric acid +Benzene MNB MDI +Ammonia Ammonium nitrate own products Adipic acid 4

5 Sales breakdown Product H 2011 Total sales(wbn) Total (%) Utilization rate(%) Total sales(wbn) Total (%) Utilization rate(%) Nitric acid 92 17% 101% 47 16% 99% Own product DNT % 100% % 78% MNB % 99% 86 28% 98% Ammonium nitrate 34 6% 102% 17 6% 97% Trade 74 14% % CDM 5 1% - 7 1% - Total % % 93% The newly built DNT plant (60,000 tons pa) started operations in 2Q 5

6 Long term contracts Partnership with strategic key customers Long term contracts are made for stable sales with key customers Product Customer Contract year Contract period Nitric acid BASF Korea 15-year 2003~2018 Rhodia Polyamide 8-year 2008~2016 MNB Kumho Mitsui Chemical 15-year 2009~2024 DNT Ammonium nitrate KPX Fine Chemical OCI 6-year 2008~ year 2011~ year 2008~ (automatically extended bi-yearly) Koryo Nobel Explosives 5-year 2011~2015 CDM RWE Power AG 6-year 2007~2012 Sales volume is defined together with minimum off-take quantity Pricing formula : All factors for risk exposure are considered - Raw materials price, Exchange rate, Inflation 6

7 Capacity expansion plan DNT (Di Nitro Toluene) #4 DNT plant construction (Unit: MT) Capacity increased by 60ktons to 240ktons Total US$100m invested Construction and test-run are successfully completed 180,000 33% 240,000 Agreed with customer for 10 year contract Expectation Total US$800m of additional turnover for 10 years Q 2011 Current level of profitability to be maintained 7

8 Capacity expansion plan Ammonium nitrate Expansion through debottlenecking 78% 80,000 (Unit: MT) Capacity to be increased to 80ktons Total US$10m to be invested Increase of market share in Japan and SE Asia 45,000 53,000 Export target (E) (Unit: US$m) 0.6 CAGR 134% (E) 8

9 Capacity expansion plan MNB (Mono Nitro Benzene) #2 MNB plant construction Capacity to be increased by 150ktons Total US$30m to be invested Commercial production to be commenced in 3Q12 Minimum investment cost for maximum turnover & profitability 1 st expansion 12% 150, ,000 2 nd expansion 88% 320,000 (Unit: MT) (E) Expectation Opportunity for more number of customers in local and overseas to minimize risks 9

10 Capacity expansion plan Nitric acid #5 Nitric acid plant construction (Unit: MT) Capacity to be increased by 400ktons Total US$150m to be invested Commercial production to be commenced in 3Q12 Shortage to be released by new line Expectation Preparation for quick growth of captive use for downstream expansion Aggressive sales expansion to China & Japan 10

11 CAPEX plan Product Capacity(MT) Existing Additional Total Capex(US$m) Completion DNT 180,000 60, , Q 2011 Ammonium nitrate 53,000 27,000 80, Q 2011 Nitric acid 640, ,000 1,040, Q 2012 MNB 170, , , Q 2012 Total 1,043, ,000 1,680,

12 Green growth business CDM business review - Launched CDM business alliance with Carbon GmbH(Austria) in Install facilities to reduce N 2 O gas in nitric acid plants CO 2 -equiv CER (certified emission reduction): 1.5mn tons - Expect annual sales and operating profit of US$6m with 22% share until 2012 Post To inherit facilities from Carbon for free - Total income will belong to Huchems after expiry of current contract with Carbon GmbH Carbon 76% CDM earning sharing UN 2% Huchems 22% Huchems 98% (2007~2012) (post 2012) UN 2% Expected revenue US$1.8m US$6m US$4.5m US$4.9m 1H (E) 2013(E)~ US$6.6m US$6m US$20m 12

13 Huchems in tnW sales in 2015 (bnw) B project 1,200 A project % CDM 600 #4 DNT & Ammonium nitrate #5 Nitric acid & #2 MNB #1 MNB (E) 2012(E) 2013(E) 2014(E) 2015(E) 13

14 Future growth strategies Continuous growth Integration to upstream & downstream Secure original technologies to increase competitiveness Searching new business opportunities for long-term growth Ammonia Benzene Toluene Upstream Nitric acid DNT MNB Downstream TDI MDI AA Globalization Increase market share in Japan, China and SE Asia Overseas production base 14

15 Outlook of polyurethane Polyurethane market analysis Polyurethane consumption structure (Unit : kt) 20,596 Other 22% Consumption by region 13,750 1,375 3,850 3,712 4,813 15,920 1,751 3,184 4,458 6,527 17,539 1,929 2,951 4,910 7,703 18,700 2,057 2,805 5,236 8,602 2,266 2,600 5,767 10,151 Other North America EU Asia 11.0% 12.6% 28.0% 49.3% Clothing Automobiles Architectural Home appliance 11% 14% 23% 30% 33.0% 18.0% 20.0% US Asia EU 43.0% 27.0% 25.0% US Asia EU 35.0% 25.0% 30.0% US Asia EU 37.0% 25.3% 28.2% US Asia EU '05 '07 '10 '12(E) '15(E) [Source: Fuji Research, ADL Analysis] [Source: Data Monitor, ADL Analysis ] [As of 2009] 15

16 2011 earnings review 2Q FY11 Performance (Wbn) Q 1Q QoQ 2Q YoY 1H H 2010 YoY Sales % % % Operating profit % % % Pre-tax profit % % % Net profit % % % 2Q10, 1Q11, 2Q11 financial information are K-IFRS non- consolidated basis Sales recorded 157bnW, improved by 25% YoY and 4% QoQ, driven by increases of product prices Operating profit was 23bnW, increased by 26% YoY and 25% QoQ due to growing CDM sales. Net profit totalled 18bnW improved 26% YoY and 17% QoQ. 16

17 Summary of historical P&L (US$m) H 2011 Sales Operating profit Pre-tax profit Net profit Sales Operating profit CAGR 15.7% CAGR 37.4%

18 Appendix

19 Stock Information Stock overview Outstanding shares : 40,878,588 shares Rights issue : 4,258,186 shares in May 2010 Bonus issue : 15,329,470 shares in September 2010 Code : KS Face value : 1,000W Market cap : W1,051bn Avg Trading Value (60D): W7.0bn Shareholding structure Largest Shareholder Stake Domestic investor & minority shareholders 34.2% Foreign ownership, 13.0% Largest Major shareholder, 37.0% shareholder 36.8% NACF, 8.3% National Foreign pension, investor 7.5% 11.1% Taekwang Industrial 11.1% Mr. Yeon-Cha Park 10.9% Jeongsan 6.2% Taekwang MTC 4.0% Other related parties 4.8% Total 37.0% 19

20 Dividends Dividends EPS(W) ,328 1,953 1,936 1,738 DPS(W) ,000 1, Dividends(Wbn) Payout ratio 46.3% 36.6% 36.9% 50.7% 48.0% 48.5% Dividend yield 2.4% 3.0% 2.6% 4.7% 4.8% 3.9% Dividends Trend Payout Trend % 50.7% 48.0% 48.5% % 36.9% 4.7% 4.8% 3.9% Dividend yield 2.4% 3.0% 2.6% (unit:wbn)

21 Financial Statements Balance sheet Income statement <Wmn> 2Q Q Total assets 664, , ,755 Fixed assets 258, , ,944 Current assets 405, , ,811 Shareholders equity 429, , ,706 Paid-in capital 40,879 40,879 40,879 Capital surplus 181, , ,842 Accumulated other comprehensive income 3,947 1,808 0 Retained earnings 202, , ,985 Total liabilities 235, , ,049 Long-term debt 59,482 43,847 3,501 Current liabilities 175, , ,548 Total liab, SE 664, , ,755 <Wmn> 1H H Sales 306, , ,342 Cost of sales 251, , ,282 Gross profit 55,658 58, ,059 Other profit 2, ,487 SG&A 15,694 16,216 35,356 Other expense 2, ,542 Operating profit 40,617 42,709 79,648 Net finance income 2,209 4,956 10,188 Pretax profit 42,826 47,665 89,836 Tax 8,686 10,876 19,316 Net profit 34,140 36,789 70,520 21

22 19F, Kukdong Bldg Chungmuro 3ga, Junggu, Seoul, Korea Investor Relations : T , sinamon@huchems.com Forward-looking statements in this presentation material reflect the current views of Huchems with respect to future events and financial performance, and are subject to certain risks and uncertainties, which could cause actual results to differ materially from those anticipated. Huchems believes the expectations reflected in this material are based on reasonable assumptions, but gives no assurance that the expectations will be realized.