LG Chem announced on July 31 that it recorded a consolidated revenue of 14.1759 trillion won and an operating profit of 599.6 billion won for the second quarter of this year. Compared to the same period last year, revenue increased by 19.0%, and operating profit rose by 25.8%, marking a return to profitability compared to the previous quarter.
The petrochemicals division reported revenue of 5.3289 trillion won and an operating profit of 426.5 billion won. Despite a decrease in sales volume due to the shutdown of the No. 2 naphtha cracking center in Yeosu, profitability improved thanks to positive inventory lag effects from rising raw material costs and expanded spreads (refining margins). The third quarter is expected to face ongoing management uncertainties due to negative lag effects from declining raw material prices and rising logistics costs.
In the advanced materials division, revenue reached 999 billion won, with an operating profit of 19.9 billion won. Increased sales in battery materials due to rising prices of cathode materials and expanded shipments of separators contributed to the revenue growth, and the division returned to profitability. The third quarter is anticipated to see further growth in battery materials sales, driven by new product launches from clients and strong performance in high-value products.
The life sciences division reported revenue of 369 billion won and an operating profit of 60 billion won. Increased export shipments compared to the previous quarter led to higher revenue and profitability. However, sales in the third quarter are expected to decline slightly as some product exports, including vaccines, are anticipated to concentrate in the fourth quarter, along with a projected decrease in profitability due to rising R&D costs.
Subsidiary Energy Solutions recorded revenue of 7.5602 trillion won and an operating profit of 113.3 billion won, while subsidiary Farm Hanong reported revenue of 274.1 billion won and an operating profit of 25.4 billion won.
Cha Dong-seok, CFO of LG Chem, stated, "Despite the heightened volatility in raw material prices, we achieved solid results driven by improved spreads for key products in the petrochemicals division due to positive inventory lag effects, as well as expanded sales of key products in the advanced materials and life sciences divisions. We will continue to push for high-value transitions in our existing businesses and foster future growth sectors such as semiconductors and mobility materials to establish a stable profit generation foundation."
Additionally, LG Chem announced last month that it would utilize government subsidies for naphtha to support small and medium-sized customers and strengthen cooperative relationships.
* This article has been translated by AI.
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