LG Chem Q1 Operating Profit 236.5 Billion KRW...15.9% Decrease YoY (Comprehensive)

[Asia Economy Reporter Park So-yeon] LG Chem announced on the 28th that it achieved business results of KRW 7.1157 trillion in sales and KRW 236.5 billion in operating profit in the first quarter of this year.

Sales decreased by 4.5% compared to the previous quarter, but operating profit turned positive compared to the previous quarter. Compared to the same period last year, sales increased by 7.5%, but operating profit decreased by 15.8%.

LG Chem CFO Vice President Cha Dong-seok said regarding the first quarter results, "We achieved results exceeding market expectations through improved spreads of major petrochemical products, reduction of losses by cutting costs in the battery business, and business structure and cost efficiency improvements in the advanced materials business." He added, "Although uncertainties such as COVID-19 and oil price crashes are expected in the second quarter, we will thoroughly focus on what we can do such as improving efficiency, manage stable cash flow, and continue core investments for the future to expand the foundation for both crisis management and growth."

Looking at the detailed first quarter results and second quarter outlook by business division, the petrochemical division recorded sales of KRW 3.6959 trillion and operating profit of KRW 242.6 billion. Although sales decreased compared to the previous quarter due to the decline in oil prices and the impact of COVID-19, solid results were achieved through improved spreads of major products such as ABS and PVC.

In the second quarter, although there is demand uncertainty due to the spread of COVID-19, profitability recovery of major raw materials and product spread improvement are expected due to the continuation of the low oil price trend.

The battery division recorded sales of KRW 2.2609 trillion and an operating loss of KRW 51.8 billion. Despite the impact of new investments in automotive batteries, the off-season entry of IT small batteries, and shutdowns due to the spread of COVID-19, the loss was reduced through cost reduction and yield improvement.

In the second quarter, although the impact of COVID-19 is inevitable, sales increase and profitability improvement are expected due to expanded shipments of automotive and cylindrical batteries and yield improvement at the Poland plant.

The advanced materials division recorded sales of KRW 1.1074 trillion and operating profit of KRW 62.1 billion. Although sales decreased compared to the previous quarter due to the off-season entry of front industries such as IT and display and the impact of COVID-19, profitability improved significantly through business structure and cost efficiency improvements.

The life sciences division recorded sales of KRW 159.3 billion and operating profit of KRW 23.5 billion, while its subsidiary Pharmanong recorded sales of KRW 221.2 billion and operating profit of KRW 35 billion.

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