Higher feedstock prices lead to lower Q4 profit for SK Corp, LG, Siam Cement

24-Jan-06

A slump in Asia's petrochemical business has led to a fall in profits for petrochem companies. Asia's third-biggest oil refiner SK Corp., has reported a fall in Q4 profits from a year ago. SK earned 481.6 billion won ($488.1 million) in net profit in the three months to Dec. 31, compared with a 607.8 billion won profit a year ago. The LG Petrochemical Co has recorded a dip of over 50% in its net income to 28.8 billion won (US$29 million), for the Q4 as against last years levels, attributed mainly to high naphtha prices. Thailand's Siam Cement PCL is expected to post a 25% drop in Q4 net profit, as higher feedstock prices bite into earnings of its petrochemical unit that contributes around 40% of Siam Cement's total sales and 40% of its earnings before interest tax depreciation and amortization. In addition to high oil prices, the company's petrochemical unit was affected by a 35-day maintenance shutdown of its Rayong Olefins unit.