LG Chem Q2 Operating Profit 405.9 Billion Won... "Petrochemicals Return to Profit in 3 Quarters"

34.3% Decrease Compared to Same Period Last Year
"Enhancing Competitiveness of 3 Major New Growth Engines... Operational Efficiency"

LG Chem's sales and operating profit in the second quarter of this year decreased compared to the same period last year. However, thanks to the petrochemical division turning profitable, the performance improved compared to the previous quarter.

LG Chem Europe CS Center in Frankfurt, Germany.
[Photo by LG Chem]

On the 25th, LG Chem announced that its consolidated sales for the second quarter reached KRW 12.2997 trillion, and operating profit was KRW 405.9 billion. Sales decreased by 14.2% and operating profit by 34.3% compared to the same period last year. Compared to the previous quarter, sales increased by 5.9% and operating profit by 53.4%.

The petrochemical division recorded sales of KRW 4.9658 trillion and operating profit of KRW 32.3 billion. Despite strong raw material prices, it turned profitable due to increased sales of key products driven by the seasonal peak in end markets such as home appliances. The third quarter is expected to see a gradual recovery in supply and demand balance, but profitability improvement is expected to be limited due to delayed global demand recovery and rising freight costs.

The advanced materials division posted sales of KRW 1.7281 trillion and operating profit of KRW 169.9 billion. Although concerns about a slowdown in the electric vehicle market growth exist, sales and profitability improved due to increased shipments of cathode materials. Electronic materials and engineering materials saw profitability improve due to an increased proportion of high value-added products. In the third quarter, shipments of battery materials are expected to decline due to weak end-market demand, but profitability is likely to improve thanks to stable metal prices.

The energy solutions division recorded sales of KRW 6.1619 trillion and operating profit of KRW 195.3 billion, down 29.8% and 57.6% respectively from the same period last year. This was largely due to a slowdown in electric vehicle market demand and price declines caused by weak metal prices. In the third quarter, sales are expected to decline more than initially forecast due to continued electric vehicle growth slowdown and weak metal prices. The company plans to enhance operational efficiency by managing production speed and utilization rates.

The life sciences division posted sales and operating profit of KRW 404.4 billion and KRW 109 billion, respectively. Sales and profitability temporarily increased due to growth in key products such as diabetes and vaccines, as well as the recognition of license-out contract payments for a rare obesity treatment. Sales of key products are expected to remain solid, but profitability is anticipated to decline due to increased research and development (R&D) costs associated with global clinical trials.

FarmHannong recorded sales of KRW 238.5 billion and operating profit of KRW 19.5 billion. While overseas sales of crop protection products continued to expand, profitability decreased compared to the same period last year due to fertilizer price declines. In the second half of the year, sales are expected to decline due to seasonal effects and increased future R&D costs, but annual profitability is projected to maintain last year's level, centered on the expansion of overseas sales of crop protection products.

LG Chem Chief Financial Officer (CFO) and President Cha Dong-seok said, "We achieved improved results compared to the previous quarter thanks to the petrochemical division turning profitable, increased shipments of battery materials, and license-out of the rare obesity treatment." He added, "We will do our best to become a company that leaps forward further through investment execution and operational optimization activities that enhance the fundamental competitiveness of the three new growth engines."

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