1. OCI H1 2025 Earnings: What Happened?

OCI recorded sales of KRW 1.065 trillion (down 3.8% YoY), operating profit of KRW 7.9 billion (down 89.0% YoY), and a net loss of KRW 19.7 billion (turning to a loss) in H1 2025. The debt-to-equity ratio increased to 105.73%.

2. Reasons for the Sluggish Performance

  • Basic Chemical Division: Delayed recovery in polysilicon demand, sluggish sales of hydrogen peroxide and TDI
  • Carbon Chemical Division: Decline in carbon black demand and prices due to global economic slowdown and tire industry inventory adjustments
  • Deteriorating Financial Structure: Increase in short-term borrowings and bond issuance leading to a higher debt-to-equity ratio
  • External Factors: High interest rates, high inflation, geopolitical uncertainties

3. OCI’s Future Outlook

While short-term challenges are expected, long-term growth potential remains.

  • Positive Factors:
    • Expected growth in secondary battery materials (SiH4) business
    • Long-term SiH4 supply contract with Nexeon
    • Potential increase in polysilicon demand related to AI and data centers
  • Risk Factors:
    • Continued global economic slowdown
    • Intensifying competition
    • Worsening financial structure

4. Investor Action Plan

  • Short-term Investment: Cautious approach needed, focus on securing earnings improvement visibility
  • Mid-to-Long-term Investment:
    • Monitor SiH4 business commercialization progress and market response
    • Check the strategy for expanding high-value-added products and diversifying export markets in the carbon chemical division
    • Monitor financial soundness securing strategy