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| 여천NCC 여수 제2사업장 전경 사진 (사진=여천NCC) |
[Alpha Biz=(Chicago) Reporter Kim Jisun] Petrochemical company Yeocheon NCC's credit rating has been downgraded due to worsening financial soundness due to sluggish business conditions. It is predicted that earnings will be difficult to improve for the time being due to the continued oversupply of propylene, its flagship product, and growing external economic uncertainties.
On the 9th, the Korea Credit Rating lowered the credit rating of Yeocheon NCC from 'A + (negative)' to 'A (stable)'. Short-term credit ratings have also been lowered one notch from 'A2+' to 'A2'. The Korea Enterprise Evaluation gives Yeocheon NCC's credit rating as 'A + (negative)'.
Yeocheon NCC is a specialized petrochemical company established in December 1999 by Hanwha Solution㈜ and DL Chemical㈜ in a 50:50 in-kind investment method. It has a basic oil production capacity of about 5.2 million tons and ethylene production capacity of 2.28 million tons, and is considered one of the top petrochemical companies in Korea along with LG Chem and Lotte Chemical.
The company performed well thanks to the global economic recovery in the first half of 2021 and disruptions in the supply of petrochemical products due to the cold wave in the U.S., but its profitability fell as the cost burden deepened from the second half of the year due to rising oil prices and the expansion of global facilities. The petrochemical industry has high profit volatility depending on supply and demand due to its nature.
Yeocheon NCC posted operating losses for five consecutive quarters from the fourth quarter of 2021 to last year. The quarterly deficit rose to 100 billion won from 62.6 billion won in the fourth quarter of 2021 to 62.3 billion won in the first quarter of last year, 33.9 billion won in the second quarter, 166.3 billion won in the third quarter and 124.3 billion won in the fourth quarter.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
