LG Chem revenue improves as feedstock prices stabilize

LG Chem, the nation’s largest chemical company, recorded an 18 quarter high operating profits for the second quarter this year, according to its earnings report released Thursday.

The company posted 615.8 billion won in operating profit, a 34.5 percent growth compared to the last quarter. In terms of revenue, LG Chem made 5.22 trillion won, a 7 percent rise from the prior quarter.

The improved profits were largely due to stabilized feedstock price backed up by peak seasonal demand from its basic materials & chemicals business division, according to the company. The division alone recorded 649.1 billion won operating profits, which is a 39.2 percent increase from the previous quarter.

Its energy solution business and IT & electronics materials business continued to post operating losses.

Batteries used for mobile, electric cars and energy storage systems are the core items for its energy solutions business. Sluggish sales of major smartphone makers led to a drop in profits for mobile batteries.

“For car and ESS batteries, sales volume is increasing but the products still need investment on technologies and major facilities,” a spokesperson from LG Chem said in a conference call announcing the earnings on Thursday.

Battery sales for electric cars scheduled on the latter half of the year would help improve company’s performances.

“GM’s Bolt will be released in the market around October and earnings from batteries will be from August,” said Kang Chang-beom, a vice president of LG Chem’s energy solutions business.

“Earnings from batteries provided for Renault’s Samsung Motors’ electric car will also begin in October.”