SONGWON Q1 Profit Drops 27 Percent Despite 7 Point 8 Percent Sales Growth

SONGWON Industrial Group kicked off 2025 with solid revenue gains, but rising costs and legal setbacks in South Korea dented its bottom line. The company reported sales of KRW 275.75 billion in Q1 2025, a 7.8% increase year-over-year, while net profit fell 27% to KRW 4.86 billion, down from KRW 6.66 billion in Q1 2024.

The decline in profitability was attributed to a recent court ruling that raised labor costs across the industry, amplifying existing margin pressures. Despite these challenges, SONGWON highlighted strong demand in core segments, especially in chemical raw materials, which saw revenues rise to KRW 208.13 billion, an 8% increase over the same period last year.

The high-performance chemicals division also posted growth, with Q1 sales climbing to KRW 67.62 billion, up 7.4% year-on-year. Within this segment, tin intermediates rebounded compared to 2024 Q1, though still down from the previous quarter. Meanwhile, PVC struggled amid weak demand in South Korea’s construction sector but showed signs of recovery by the end of the quarter.

SONGWON’s fuel and lubricant additives benefited from smoother shipping logistics and robust market demand, while the coatings business bounced back from seasonal lows, defying industry-wide overcapacity and price wars. On the other hand, TPU/SPU markets remained under pressure due to sluggish Asian demand and forex volatility.

Looking ahead, SONGWON warned that price competition, regulatory shifts, and supply surpluses could weigh on the year’s outlook. Nonetheless, the company remains focused on operational efficiency, cost discipline, and expanding market share, while continuing to pursue long-term sustainable growth.