SEOUL, November 05 (AJP) - LG Chem posted a 17.4 percent drop in third-quarter operating profit on Thursday as its petrochemical business swung to a loss, offsetting higher earnings at battery unit LG Energy Solution.
According to regulatory filings, the South Korean chemical and battery materials maker's operating profit fell to 561.2 billion won ($418 million) from 679.7 billion won a year earlier.
Revenue rose 34.0 percent to 15.5 trillion won from a restated 11.56 trillion won.
The company swung to a net loss of 600 billion won from a net profit of 447.3 billion won a year earlier, with a pretax loss from continuing operations of 645.5 billion won.
LG Energy Solution, which reported on Nov. 3, posted a net loss of 296.9 billion won for the quarter.
It cited valuation losses on derivatives tied to its foreign-currency bonds, interest costs and an impairment on its small pouch batteries for IT devices.
The petrochemical unit posted an operating loss of 175.6 billion won, compared with a profit of 29.1 billion won a year earlier, on revenue of 4.75 trillion won.
LG Chem said the loss came from narrower product spreads, the gap between product prices and feedstock costs, as higher-priced feedstock bought earlier fed into production. Higher freight costs and a stronger won added to the loss.
The advanced materials unit's operating profit rose to 39.7 billion won from 7.3 billion won, and revenue grew 28.0 percent to 1.07 trillion won. The company cited higher battery materials volumes, a one-off gain and steady sales of electronic materials for chips and cars.
Operating profit at the life sciences unit fell to 23.2 billion won from 100.6 billion won, and revenue dropped 10.0 percent to 337.3 billion won.
The year-earlier quarter included an upfront licensing payment for a rare obesity treatment. This quarter, the company pointed to lower export shipments and higher research and development costs.
Agrochemical subsidiary Farm Hannong's operating loss widened to 20.7 billion won from 20.0 billion won, and revenue slipped 1.2 percent to 100.3 billion won.
LG Energy Solution's operating profit rose 25.7 percent to 756.0 billion won, and revenue jumped 59.0 percent to 9.64 trillion won on surging shipments of energy storage systems and steady supply of EV batteries.
The figure included 416.9 billion won in U.S. production tax credits.
"Despite uncertainty in the market environment, including higher oil prices from geopolitical risks in the Middle East and greater volatility in raw material prices, company-wide earnings stayed at a stable level on improved profitability in advanced materials and energy solutions," Chief Financial Officer Cha Dong-seok said in a statement.
LG Chem expects high oil prices and lost output from scheduled maintenance at its No. 1 naphtha cracker in Yeosu to weigh on petrochemicals in the fourth quarter.
It plans to sell more high-value products, such as isopropyl alcohol for cleaning semiconductors and synthetic rubber for EV tires.
Shares of LG Chem were trading at 247,500 won, up 0.2 percent, as of 2:10 p.m.
AJP Takeaways
- LG Chem reported a third-quarter 2026 operating profit of 561.2 billion won on Nov. 5, 2026, down 17.4 percent from a year earlier, as its petrochemical unit swung to a 175.6 billion won loss.
- Revenue rose 34.0 percent to 15.5 trillion won, but LG Chem posted a net loss of 600 billion won, compared with a net profit of 447.3 billion won in the third quarter of 2025.
- LG Energy Solution, LG Chem's battery subsidiary, raised its operating profit 25.7 percent to 756.0 billion won on surging energy storage shipments, including 416.9 billion won in U.S. production tax credits.
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