[Click eStock] "JC Chemical's Q2 Operating Profit Surges 189%... Palm and Biofuel Businesses Both Booming"

JC Chemical reported an earnings surprise in the second quarter, driven by the simultaneous growth of its palm plantation and biofuel businesses. With Indonesia’s mandatory biodiesel blending policy and rising palm production, market watchers expect business performance to continue improving in the second half of the year.

According to independent research firm ValueFinder on August 14, JC Chemical recorded consolidated revenue of 142.8 billion won and operating profit of 11.5 billion won in the second quarter. Compared to the same period last year, revenue increased by 54.9%, while operating profit surged by 189%.

Accumulated revenue for the first half of the year was 264 billion won, up 54.8% year-on-year. Operating profit soared 108% to 13 billion won. Net profit totaled 10.2 billion won. With just the first half’s operating profit, the company has already surpassed last year’s annual operating profit of 7.7 billion won.

The company attributed this improvement to lower cost ratios from utilizing low-priced feedstock, changes in product mix focused on exports, and higher sales prices in the palm business—all having an impact simultaneously.

Palm plantation operations played a particularly significant role in the performance improvement. In the first half, revenue from palm plantations rose 45% year-on-year to 49.7 billion won, and operating profit increased by 86% to 9.3 billion won. The operating profit margin reached a record high at 18.7%. Indonesia-based subsidiaries contributed 72% of the total operating profit.

The improvement was driven both by a rise in crude palm oil (CPO) prices—resulting from higher oil prices in the Middle East—and an increase in sales volume as palm trees in the East Kalimantan plantation entered their peak production period.

In addition, Indonesia's government began implementing the B50 policy last month, requiring 50% palm-based fuel blending with biodiesel—serving as another positive factor. The higher biodiesel blending ratio is expected to further increase demand for CPO, the core feedstock.

The biofuel business also demonstrated robust growth. Sales volume of pre-treated used cooking oil, which is used as a sustainable aviation fuel feedstock, exceeded 35,000 tons—more than double the previous year. Biodiesel export volume grew approximately fivefold, while marine biofuel volume increased about fourfold.

The pre-treatment facility for used cooking oil at Ulsan New Port expanded its annual capacity from 60,000 tons to 120,000 tons, with the effect of the expansion starting to reflect in the second quarter. The current operating rate is about 70%.

The low-cost feedstock pre-treatment facility at the Onsan plant is under construction, with an investment of 19.6 billion won, and mechanical completion has been moved forward to early next year. In July, the company signed a business agreement with Sumitomo Corporation covering four sectors: feedstock procurement, product sales, overseas projects, and new investments—establishing a foundation for global business expansion.

ValueFinder researcher Jun Woobin commented, "JC Chemical is the only domestic biofuel company to have achieved full vertical integration, from feedstock cultivation to final fuel production," adding, "The company has entered a phase of simultaneous price and volume growth."

He further stated, "Rising CPO demand driven by Indonesia’s B50 mandate, along with the company’s early entry into the sustainable aviation fuel and renewable diesel value chain, will continue to create positive momentum through the second half. The concurrent growth of both the palm and biofuel businesses is expected to persist."

This content was produced with the assistance of AI translation services.