LG Chem Rebounds in Q2 Results, but Petrochemical Slump 'Continues'

Consolidated operating profit reaches 476.8 billion KRW, up 21% year-on-year
Subsidiary LG Energy Solution drives performance improvement
"Challenging business environment reflected, including tariff disputes"

LG Chem recorded a consolidated operating profit of 476.8 billion KRW in the second quarter of this year, marking a 21.5% rebound compared to the same period last year. However, this result was driven by improved profitability at its subsidiary, LG Energy Solution, in North America, while the company's core petrochemical business continues to underperform.

On August 7, LG Chem announced in its earnings release that its sales for the second quarter of 2025 reached 11.4177 trillion KRW, with an operating profit of 476.8 billion KRW. The petrochemical division posted sales of 4.6962 trillion KRW and an operating loss of 90.4 billion KRW in the second quarter. This was due to a combination of factors, including the US tariff dispute, risks in the Middle East, and negative foreign exchange effects. The division has reported losses for three consecutive quarters since the fourth quarter of last year.

Chief Financial Officer Cha Dongseok stated, "In the second quarter, the company continued to face a challenging business environment due to weak global demand resulting from the US tariff dispute, as well as conservative inventory management by clients ahead of the early termination of electric vehicle subsidies." He added, "Going forward, we will maintain solid mid- to long-term growth by restructuring our portfolio to focus on high-growth and high-profit businesses."

The advanced materials division recorded sales of 1.0605 trillion KRW and an operating profit of 70.9 billion KRW. Although shipments of battery materials declined, high value-added products such as electronic materials and engineering materials helped support performance. The life sciences division posted sales of 337.1 billion KRW and an operating profit of 24.6 billion KRW. Sales of major therapeutic products remained solid, and performance is expected to improve in the third quarter with the receipt of the remaining upfront payment from the technology export of a rare obesity treatment.

Subsidiary LG Energy Solution reported sales of 5.5654 trillion KRW and an operating profit of 492.2 billion KRW. Despite client inventory adjustments, the company maintained profitability through expanded production in North America, an improved product mix, and cost reduction efforts. In the third quarter, shipments of cylindrical batteries are expected to increase, and demand for energy storage systems (ESS) in North America is also anticipated to grow.

Farm Hannong posted sales of 242.4 billion KRW and an operating profit of 12.5 billion KRW. Although sales are expected to decline in the second half of the year due to seasonal factors, profitability is likely to improve through increased sales of crop protection products.

Meanwhile, LG Chem's consolidated debt ratio for the second quarter stood at 110.7%, up 13.0 percentage points from the previous quarter. Borrowings totaled 31.8 trillion KRW, and the net debt ratio was 52.5%.

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