Korea Zinc is experiencing a decline in its stock price following disappointing third-quarter results. Although revenue saw a significant increase, operating profit nearly halved compared to the same period last year.
According to the Korea Exchange, as of 1:29 PM, Korea Zinc's shares were trading at 966,000 won, down 23,000 won (2.33%) from the previous trading day. The stock opened at 923,000 won and briefly fell to 906,000 won during the session.
For the third quarter, Korea Zinc reported consolidated revenue of 6.0861 trillion won, a 46.3% increase year-on-year. However, operating profit dropped to 141.7 billion won, a decrease of 48.2% compared to the same period last year. Compared to the previous quarter, it fell by 75.9%, falling short of market expectations.
Park Kwang-rae, a researcher at Shinhan Investment Corp., noted, "The negative lag effect occurred as raw materials purchased at high prices and exchange rates in the first half were reflected in sales at lower prices in the third quarter. Additionally, the decline in refining fees contributed to the downturn."
He added that the decline in consolidated performance was also influenced by a one-time accounting adjustment related to the U.S. Crucible project, which resulted in a deduction of approximately 60 billion won that had been reflected in the first half's consolidated profit and loss due to a change in accounting treatment in the third quarter.
However, he anticipates a potential improvement in performance for the fourth quarter, predicting a consolidated operating profit of 211.2 billion won, a 49.1% increase. He believes that the elimination of the accounting adjustment related to the U.S. project and improvements in subsidiary profits will drive a rebound in consolidated results.
* This article has been translated by AI.
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