PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close
DL posted record quarterly results in 2Q26 with revenue of KRW 1,667.9bn and operating profit of KRW 256.5bn, yet it is simultaneously funding the restructuring of Yeochon NCC, the 50%-owned cracker joint venture.
In 2Q26 consolidated revenue reached KRW 1,667.9bn and operating profit KRW 256.5bn, the highest quarterly figures on record, with net profit attributable to owners at KRW 125.2bn.
In 2025, despite revenue of KRW 5,326.7bn and operating profit of KRW 298.5bn (5.6% margin), the company recorded a net loss attributable to owners of KRW 88.0bn, illustrating the gap between operating and bottom-line results.
The company attributes the profit improvement to simultaneous contributions from specialty products at DL Chemical and Kraton, U.S. power assets at DL Energy, and the GLAD hotel business.
Under the government-approved Yeosu No.1 petrochemical restructuring, DL Chemical must inject KRW 272.5bn via a rights issue and contribute downstream assets in kind.
The debt-to-equity ratio fell from 167.3% in 2023 to 147.6% in 2025, while operating cash flow held at KRW 514.9bn in 2025.
DL was founded in 1939 and converted into a holding company in 2021 by spinning off construction into DL E&C and petrochemicals into DL Chemical. Brand royalties, dividends and rental income form the holding company's own revenue base, and it consolidates 60 subsidiaries.
Segments comprise manufacturing (petrochemicals, materials, auto parts), energy (independent power production) and investment/other (hotels, golf courses, real estate leasing), with polyethylene and polybutene produced in manufacturing.
Petrochemicals anchor consolidated earnings: DL Chemical sustains high margins in polybutene (PB) while polyethylene (PE) benefits from product price increases, and Kraton, with plants in North America and Europe, is split into polymer and chemical divisions.
Cariflex, the medical-grade latex business, has pursued product development and margin expansion around North American demand and the start-up of a new Singapore plant. On the non-chemical side sit DL Energy, built on the U.S. Niles and Fairview power assets, and GLAD, which runs the hotel business.
The group promotes a vertically integrated development-construction-operation-distribution chain combining DL Energy's project development, financing and operating capability, DL E&C's power plant, small modular reactor (SMR) and nuclear EPC capability, and Daelim's energy logistics and trading.
Commodity exposure comes through Yeochon NCC, a joint venture owned 50:50 with Hanwha Solutions, and the current plan under discussion is to combine Lotte Chemical's Yeosu cracker and downstream assets into a merged entity in which the three companies each hold 33.3%.
In auto parts, the company cited an outsourcing order for Hyundai Motor cylinder blocks as driving higher revenue in 1Q26.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩1.3T | ₩72B | 5.4% |
| 2025Q3 | ₩1.4T | ₩109.4B | 7.9% |
| 2025Q4 | ₩1.2T | ₩11.8B | 1.0% |
| 2026Q1 | ₩1.3T | ₩112.9B | 8.8% |
| 2026Q2 | ₩1.7T | ₩256.5B | 15.4% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩5.2T | ₩287.5B | ₩72.3B | 5.6% | 1.8% | 160.3% |
| 2023 | ₩5T | ₩150.7B | -₩133.4B | 3.0% | −3.5% | 167.3% |
| 2024 | ₩5.6T | ₩412.5B | ₩89.4B | 7.3% | 2.2% | 161.9% |
| 2025 | ₩5.3T | ₩298.5B | -₩88B | 5.6% | −2.2% | 147.6% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04
Annual revenue stayed in a narrow band: KRW 5,175.0bn in 2022, KRW 5,017.8bn in 2023, KRW 5,615.4bn in 2024 and KRW 5,326.7bn in 2025, while operating profit jumped from KRW 150.7bn (3.0% margin) in 2023 to KRW 412.5bn (7.3%) in 2024 before easing to KRW 298.5bn (5.6%) in 2025.
The striking feature is the gap between operating and bottom-line profit. In 2025 the company recorded a net loss attributable to owners of KRW 88.0bn despite KRW 298.5bn of operating profit, and in 2023 a net loss of KRW 133.4bn against KRW 150.7bn of operating profit.
One cited driver is accumulated losses at the 50%-owned joint venture: Yeochon NCC posted consolidated operating losses of KRW 238.8bn in 2023, KRW 150.3bn in 2024 and KRW 251.4bn in 2025, three consecutive loss years, and it has run 18 straight quarters of operating losses since 4Q21 with cumulative losses above KRW 1trn.
Quarterly results are volatile: 2Q25 operating profit of KRW 72.0bn with a net loss to owners of KRW 73.2bn, 3Q25 operating profit of KRW 109.4bn with net profit of KRW 14.6bn, and 4Q25 operating profit collapsing to KRW 11.8bn with a net loss of KRW 5.9bn.
Into 2026, operating profit reached KRW 112.9bn with net profit of KRW 7.2bn in 1Q, then KRW 256.5bn with net profit of KRW 125.2bn in 2Q.
For 2Q26, the company said both revenue and operating profit were record quarterly highs, driven by expanded petrochemical earnings at DL Chemical and Kraton plus strong results at subsidiaries including DL Energy and GLAD.
In detail, DL Chemical's operating profit rose 160% year on year while Kraton's increased by more than KRW 100bn, and management also pointed to product price gains and wider spreads tied to Middle East geopolitical tension - meaning the recent surge embeds cyclical price and spread factors.
On the balance sheet, operating cash flow held up at KRW 325.0bn in 2023, KRW 557.1bn in 2024 and KRW 514.9bn in 2025, while the debt-to-equity ratio declined from 167.3% in 2023 to 147.6% in 2025.
Korean petrochemicals sit in a phase of structural oversupply created by large Chinese capacity additions combined with slowing global demand, so the industry's pivot is policy-led capacity cuts rather than a cyclical recovery.
On 20 July 2026 the Ministry of Trade, Industry and Energy approved the Yeosu No.1 restructuring project submitted by Yeochon NCC, Lotte Chemical, Hanwha Solutions and DL Chemical, the second such case after the Daesan No.1 project in February.
Two Yeochon NCC ethylene units will be idled during the three-year restructuring period, removing 1.39mn tonnes of annual capacity, and Yeochon NCC's capacity shrinks from 2.28mn tonnes to roughly 0.9mn tonnes per year.
Participating companies commit to self-help measures including a KRW 545.0bn capital increase and capacity cuts, while the government and creditors provide a support package of more than KRW 700.0bn spanning finance, tax and R&D.
Product mix also shifts: the new merged entity plans to pivot toward high-value, eco-friendly products such as medical-grade low-density polyethylene and polyolefin elastomer.
In competitive terms, DL shares restructuring costs through the joint venture on the commodity side, but its consolidated earnings come from specialties such as polybutene, SBC and medical latex plus power and hotels, which differentiates it from pure commodity chemical producers.
That said, geopolitical risk around the Strait of Hormuz has been flagged as a variable that could sharply raise feedstock costs for naphtha-based crackers, so Middle East developments cut both ways through prices and costs.
The government intends to press ahead with restructuring talks in Ulsan as well and to prepare a comprehensive chemical industry plan during the second half of 2026, leaving the regulatory and support framework in flux.
Management's stated direction is expanding specialties and reinforcing the energy value chain. In its 2Q26 release DL cited specialty-led petrochemical competitiveness and steady subsidiary growth behind the record quarter, saying it will keep expanding global business on the group's energy infrastructure capability.
On utilisation, KB Securities in a May 2026 report relayed from the 1Q call that headquarters PE utilisation would be maintained at 60%, the polymer division kept at full run rates, the chemical division moving from 80% in 1Q to the low-to-mid 90s in 2Q-3Q, and Cariflex's added capacity ramping up in the second half.
In the same report, KB Securities maintained a Buy rating and raised its target price significantly. On the other side of the ledger sits the funding schedule.
Hanwha Solutions and DL Chemical each plan to inject KRW 272.5bn to repay KRW 545.0bn of Yeochon NCC's market borrowings, and a further KRW 253.2bn is earmarked for integration piping, infrastructure and high-value product conversion, bringing the total the two must fund to about KRW 800bn.
The government expects Yeochon NCC to turn to operating profit from 2029 with an improved debt ratio, but until then Hanwha Solutions and DL Chemical must keep absorbing restructuring costs.
In energy, DL Energy delivered peak-season-like results in a seasonally weak 2Q26, with revenue up 74% and operating profit up 121% on higher power sales and rising U.S. capacity payments, and whether that carries into the second-half peak season is a key watch item.
For hotels, the company said 2Q26 average room rates and occupancy exceeded the 3Q and 4Q 2025 peak-season levels, making inbound travel demand the swing factor.
DL trades well below its book value per share, which can be read as the combination of the discount typically applied to holding companies and the petrochemical downturn.
On earnings, the direction shifted from a 2025 net loss attributable to owners to net profit in 1H26, and the sum of the most recent four quarters is also in profit, so an earnings-based multiple is computable.
That multiple, however, embeds the record 2Q26 result, and since management cited higher product prices and wider spreads as drivers, the underlying earnings base itself can swing with market conditions.
On dividends, the confirmed dataset carries no recent cash dividend per share, so a yield-based comparison is not possible and the evidence base for total-return judgements is limited.
As for valuation opinions, KB Securities maintained a Buy rating and raised its target price to KRW 83,000 in a May 2026 report, which is that broker's view.
Ultimately, whether the discount to net assets is warranted depends on when the Yeochon NCC funding requirements conclude and at what level specialty and energy earnings settle.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04
The KRW 256.5bn of operating profit in 2Q26 marks a step change versus KRW 112.9bn in the prior quarter and KRW 11.8bn in 4Q25. The company highlighted that chemicals, power and hotels grew simultaneously rather than results concentrating in one business.
GLAD recorded a 33.1% operating margin with record second-quarter revenue and operating profit. A more dispersed earnings base creates some buffer against a single-sector shock.
DL Energy's 2Q26 operating profit rose 121% and revenue 74% year on year, which the company attributed to higher power sales, rising U.S. capacity payments and contributions from the Niles and Fairview assets.
Management said results approached peak-season levels even in a seasonally slow quarter, lifting the base for the power segment. Power demand and capacity payments follow a different cycle from chemical spreads, offering potential offset to earnings swings. Capacity payments, however, are themselves subject to market and regulatory design.
The Yeosu No.1 project idles two Yeochon NCC ethylene units during the restructuring period, cutting 1.39mn tonnes of annual capacity, while the government and creditors provide a support package of over KRW 700.0bn including KRW 450.0bn of new funding for high-value conversion and KRW 200.0bn of additional import loan guarantees.
Commentary notes that the 50% stakes held by Hanwha Solutions and DL Chemical become one-third each alongside Lotte Chemical, likely easing the operating burden. Lower commodity exposure would shrink one source of volatility in DL's consolidated results.
Following KRW 200.0bn in March 2025 and KRW 300.0bn in November 2025, this KRW 545.0bn issue brings total fresh capital into Yeochon NCC to KRW 1,045.0bn in under two years, with half borne by DL Chemical. Yeochon NCC's credit rating was cut three times in a row, from A0 in 2024 to A- in 2025 and BBB+ in 2026.
Because the restructuring simultaneously pursues asset integration, capacity cuts and high-value conversion, commentators note the possibility of further investment burdens. From a holding company perspective this pressures both dividend and investment capacity.
In 2025 operating profit was KRW 298.5bn but the net loss attributable to owners was KRW 88.0bn, and in 2023 operating profit of KRW 150.7bn came with a KRW 133.4bn net loss to owners. Quarterly, 2Q25 paired KRW 72.0bn of operating profit with a KRW 73.2bn net loss, and 4Q25 KRW 11.8bn with a KRW 5.9bn net loss.
In other words, operating-level profit repeatedly fails to translate into owner-level profit. That reflects the structural reality that equity-method holdings and non-operating items can dominate the bottom line.
Among the drivers of 2Q26 improvement, management also cited product price gains and wider spreads linked to Middle East instability. Conversely, observers warn that if Middle East geopolitical risk sends oil prices swinging, feedstock costs for naphtha-based facilities could surge.
The same variable can therefore add to or subtract from profit depending on direction. A record quarter does not automatically establish a sustainable earnings level.
Naphtha, the key petrochemical feedstock, tracks crude prices, and a Strait of Hormuz blockade has been flagged as a serious external threat that could cloud the merged entity's profitability outlook. If product prices fail to offset cost inflation, spreads can compress quickly.
KB Securities reported in May 2026 that on the earnings call DL noted a shortage of butadiene for polybutene at its headquarters operation. Misalignment between feedstock procurement and utilisation plans widens quarterly earnings swings.
Total liabilities stood at KRW 7,261.1bn at end-2025 with a debt-to-equity ratio of 147.6%, down from 167.3% in 2023 but still elevated. On top of that, the combined rights issue and restructuring investment require Hanwha Solutions and DL Chemical to fund roughly KRW 800bn.
Operating cash flow held at KRW 514.9bn in 2025, but overlapping restructuring outlays, dividends and investment priorities could narrow cash allocation flexibility. The most demanding scenario is funding pressure coinciding with weakening subsidiary earnings.
Discussions on transferring the polyethylene downstream division together with related borrowings have exposed differing calculations between Hanwha Solutions and DL Chemical. The ratio of in-kind contributions and the balance of asset values remain contested, so final terms could still shift.
With the government planning a comprehensive chemical industry package during 2H26, the support and regulatory framework may change further. Delays in establishing the merged entity or in the capacity-cut schedule would also push back expected cost savings.
Preliminary 3Q26 results and the earnings call. The key questions are whether the record KRW 256.5bn of 2Q operating profit holds without spread tailwinds, and whether DL Energy's peak season and Kraton's higher chemical division utilisation are confirmed.
Watch the actual timing and method of DL Chemical's KRW 272.5bn share of the KRW 545.0bn capital increase to repay Yeochon NCC borrowings, along with progress on the in-kind downstream contribution and the establishment of the merged entity.
The contents of the comprehensive chemical industry plan the government intends to prepare. Support for high-value, eco-friendly conversion and the direction of further complex-level restructuring will directly affect DL Chemical's cost burden and portfolio transition pace.
Confirmation of full-year 2026 results and decisions on dividends and shareholder returns. This is the point to check where annual profit settles after the KRW 88.0bn net loss to owners in 2025, and whether a return policy is presented.
The actual contribution from Cariflex's added capacity, for which a second-half utilisation ramp was flagged, and the trajectory of Yeochon NCC's earnings after the idling of targeted units. Since the government has said it expects an operating profit turnaround from 2029, interim milestones warrant monitoring.
DL's recent performance boils down to two opposing facts. One is the record quarter of KRW 1,667.9bn in revenue and KRW 256.5bn in operating profit in 2Q26, with net profit attributable to owners of KRW 125.2bn.
The other is the 2025 profit structure, where KRW 298.5bn of operating profit still produced a KRW 88.0bn net loss to owners.
The improvement is spread across petrochemicals led by DL Chemical and Kraton plus strong results at subsidiaries such as DL Energy and GLAD, lowering single-business dependence, yet management's own explanation also includes product price increases and wider spreads as contributing market factors.
On the burden side, a schedule requiring roughly KRW 800bn of combined rights issue and restructuring investment to be shared with Hanwha Solutions is under way, and the government's expected turnaround date for Yeochon NCC is 2029.
Financially, the debt-to-equity ratio easing from 167.3% in 2023 to 147.6% in 2025 and operating cash flow of KRW 514.9bn in 2025 provide some cushion.
What remains to be verified is how much of the expanded specialty and energy earnings survives once market conditions normalise, and when the commodity restructuring costs conclude. This material is for information purposes only and contains no buy or sell recommendation or target price.
Report written 2026-09-05 · Data as of 2026-09-04
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