LG

■ Q2 Consolidated Performance (Including LG Energy Solution)
 □ Revenue: KRW 14.1759 trillion (19.0% increase YoY)
 □ Operating Profit: KRW 599.6 billion (25.8% increase YoY)
 
■ CFO Dong Seok Cha:
 “We delivered solid results on the back of improved spreads for key products, driven by the favorable inventory lagging effect in petrochemicals, as well as expanded sales of major products in Advanced Materials and Life Sciences.”
 “We will continue to pursue the high-value transformation of our existing businesses and build a foundation for stable profit generation by fostering future growth businesses such as semiconductor and mobility materials.”
 
 
LG Chem announced on the 31st that it recorded consolidated revenue of KRW 14.1759 trillion and operating profit of KRW 599.6 billion for the second quarter of this year. Compared to the same period last year, revenue increased by 19.0% and operating profit by 25.8%. On a quarter-over-quarter basis, revenue rose by 15.8%, while operating profit turned to a profit.
 
CFO Dong Seok Cha stated, “Despite heightened volatility in raw material prices, we delivered solid results on the back of improved spreads for key products, driven by the favorable inventory lagging effect in the Petrochemicals Company, as well as expanded sales of major products in the Advanced Materials and Life Sciences Companies.”
 
He added, “We will continue to pursue the high-value transformation of our existing businesses and build a foundation for stable profit generation by fostering future growth businesses such as semiconductor and mobility materials.”
 
The detailed second-quarter performance and third-quarter outlook by business division are as follows.
 
The Petrochemicals Company recorded revenue of KRW 5.3289 trillion and an operating profit of KRW 426.5 billion. Despite a decline in sales volume due to the suspension of operations at NCC Plant 2 in Yeosu, profitability improved on the back of the favorable inventory lagging effect from rising feedstock prices and wider product spreads.
 
In the third quarter, business uncertainty is expected to persist due to the unfavorable lagging effect from declining feedstock prices and rising logistics costs.
 
The Advanced Materials Company posted revenue of KRW 999.0 billion and an operating profit of KRW 19.9 billion. Revenue increased on the back of higher battery materials sales, including rising cathode material prices and expanded separator shipments, as well as the full-scale mass production of new electronic materials products. At the same time, operating profit turned to a profit.
 
In the third quarter, battery materials revenue is expected to grow, supported by expanded cathode material shipments to new customers and a gradual increase in sales of separators for ESS. Electronic materials are projected to deliver solid results, driven by increased sales of customers’ new products, including semiconductor materials, and a portfolio centered on high-value-added products.
 
The Life Sciences Company recorded revenue of KRW 369.0 billion and an operating profit of KRW 60.0 billion. Revenue and profitability rose compared to the previous quarter, driven by increased export shipment volumes.
 
In the third quarter, revenue is expected to decline slightly as export volumes of certain products, including vaccines, are anticipated to be concentrated in the fourth quarter. At the same time, profitability is projected to fall due to increased R&D expenses.
 
The subsidiary LG Energy Solution reported revenue of KRW 7.5602 trillion and an operating profit of KRW 113.3 billion. Revenue grew on the back of solid demand for cylindrical and pouch batteries for EVs, increased shipments driven by expanded ESS production capacity in North America, and reduced fixed costs. At the same time, operating profit turned to a profit.
 
In the third quarter, revenue growth is expected, supported by the accelerating growth of the North American ESS market backed by firm demand and a stable increase in shipments of cylindrical and pouch batteries for EVs.
 
The subsidiary Farm Hannong recorded revenue of KRW 274.1 billion and an operating profit of KRW 25.4 billion. Revenue and profitability improved year-on-year, driven by expanded sales of crop protection products and advance purchasing demand for fertilizers in the wake of the war in the Middle East.
 
In the third quarter, despite increased sales of crop protection products and seeds, profitability is expected to decline year-on-year due to rising raw material costs stemming from factors such as the high exchange rate and increased R&D expenses.