LG Chem Q2 Sales 12.2 Trillion KRW, Operating Profit 878.5 Billion KRW... "Securing Profitability in Advanced Materials" (Comprehensive)

Quarterly Record High Sales

Chadongseok CFO
"Strengthening Efforts to Improve Profitability Amid External Uncertainties
"Investment Focused on Three Major New Growth Engines Including Battery Materials Business"

[Asia Economy Reporter Donghoon Jung] LG Chem announced on the 27th that it achieved business results of KRW 12.2399 trillion in sales and KRW 878.5 billion in operating profit for the second quarter of this year.

Compared to the same period last year, sales increased by 7.0%, but operating profit decreased by 59.0%.

LG Chem CFO (Chief Financial Officer) Vice President Dongseok Cha said regarding the second quarter results, "Despite the continued difficult business environment due to high oil prices, global inflation, and China's COVID lockdown situation, we secured the highest quarterly sales and resilient profitability compared to market conditions through the petrochemical business based on a differentiated product portfolio and the advanced materials business, which showed significant sales growth and improved profitability."

He added, "In a situation of great external uncertainty, we will continue to prepare for future growth through customer-centric activities, strengthened internal efforts to improve profitability, and investments focused on the three major new growth engines, including the rapidly growing battery materials business."

Looking at the detailed second quarter results and third quarter outlook by business division, the petrochemical division recorded sales of KRW 5.9876 trillion and operating profit of KRW 513.2 billion. Although product spreads worsened due to rising raw material prices and global economic slowdown, it recorded resilient profitability (8.6%) compared to market conditions based on a differentiated product portfolio such as POE (polyolefin elastomer) for solar films and SAP (superabsorbent polymer) for diapers.

For the third quarter, difficult market conditions are expected due to continued global demand sluggishness caused by high oil prices and inflation, increased regional supply volumes, and entry into the seasonal off-season, but efforts to defend profitability centered on high value-added products will continue.

The advanced materials division recorded sales of KRW 2.0184 trillion and operating profit of KRW 335.4 billion. It achieved the highest quarterly sales due to expanded shipments of battery materials and continued price increases due to rising raw material costs, and profitability improved due to increased shipments of high-profit products such as high-nickel cathode materials and semiconductor materials, as well as a favorable exchange rate environment.

Although the impact on profitability due to the turnaround in metal prices is inevitable in the third quarter, growth is expected to continue centered on the battery materials business, including expanded shipments of cathode materials.

The life sciences division recorded sales of KRW 221.7 billion and operating profit of KRW 24.2 billion. It generated solid sales and profitability as sales of major products such as diabetes treatments and growth hormones continued to expand.

In the third quarter, solid sales growth is expected with continued strengthening of market share for major products such as diabetes treatments and vaccines, and recovery of the aesthetic business, while R&D costs are expected to increase due to global clinical trials for new drug projects.

LG Energy Solution recorded sales of KRW 5.0706 trillion and operating profit of KRW 195.6 billion. Sales increased compared to the previous quarter due to increased sales of cylindrical batteries for electric vehicles and expanded metal price-linked contracts in response to rising raw material prices, but profitability declined due to the impact of China's lockdown caused by the spread of COVID and global logistics disruptions.

In the third quarter, significant sales growth is expected centered on strategic customers due to new car launches by major clients and the full-scale operation of the first phase of the joint venture with GM. Farm Hannong recorded sales of KRW 240.5 billion and operating profit of KRW 17.1 billion. Sales grew compared to the same period last year as domestic and overseas sales of crop protection products expanded, including increased exports of Terado.

In the third quarter, annual sales and profitability are expected to improve due to expanded overseas sales of crop protection products and increased sales of specialty fertilizers.

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