Enhanced Earnings in 4Q23 and Future Outlook
Korea Zinc is expected to show improved earnings in the fourth quarter of 2023, driven by an increase in sales volume and prices. The company’s 4Q23 sales are projected to be around W2.45tn, marking a 6.9% quarter-on-quarter growth, with an operating profit of W186bn. This growth is attributed to expanded sales volumes, particularly in lead and copper, and price increases in zinc, lead, and gold.
The company is shifting its focus to copper and nickel smelting, aiming to significantly enhance its annual smelting capacities for these metals by 2028. Korea Zinc plans to increase copper smelting capacity from the current 26,000 tons to 150,000 tons, which at the current price, could generate annual sales of approximately W1.6tn. Similarly, the target for nickel smelting capacity is set at 63,000 tons, potentially bringing in around W1.3tn in annual sales.
The expansion in copper and nickel smelting is projected to contribute significantly to Korea Zinc’s future sales. Combined, these expansions are expected to add about W2.9tn in annual sales, accounting for nearly 29% of the company’s estimated sales for 2023. Moreover, the company’s ambition extends beyond smelting to include substantial portions of copper foil and nickel sulfate processing, promising further sales growth.
Replicating Past Success in Future Ventures
Korea Zinc aims to replicate the growth achieved in zinc and lead smelting in its copper and nickel operations. The company’s guidance, presented at its December 2023 Investor Day, includes ambitious targets for 2028, with projected sales of W21.3tn and EBITDA of W2.3tn.