LG Chem reports record profit and sales in the second quarter
That's the highest quarterly profit in the company’s 74-year history.
Quarterly revenue hit an all-time high of 11.46 trillion won, up 65.2 percent on year. Operating profit soared 290.2 percent to 2.23 trillion won during the same period, also the record high.
Analyst expectations for revenue were 10.5 trillion won and for operating profit 1.17 trillion won.
“The company achieved the record performance with the help of increased sales in petrochemicals and life sciences, as well as the expansion of the battery materials businesses,” said Cha Dong-seok, LG Chem’s chief financial officer during a conference call on Thursday.
In the petrochemicals business, the company’s traditional cash cow, operating profit grew 207.4 percent on year to 1.33 trillion won in the second quarter. Revenue rose from 3.3 trillion won to 5.27 trillion won on year.
The life science business reported 29.1 billion won in operating profit, up 107 percent on year. Revenue increased to 203 billion won from 160 billion won, the best quarterly performance, backed by increased sales of major products like diabetes treatment drug Zemiglo and growth hormone injection Eutropin.
LG Energy Solution, the spun-off battery unit wholly owned by LG Chem, reported 815.2 billion won in quarterly operating profit, a 422.4 percent increase on year, and 5.13 trillion won in revenue, 81.8 year-on-year growth. Profit is likely to increase further in the third quarter as demand for electric vehicles is likely to grow, LG said.
On Thursday, LG Chem announced that it will acquire the Chemical Electronic Material (CEM) division of LG Electronics for 525 billion won in an attempt to ramp up its efforts to become “No. 1 battery material company in the world."
The CEM division manufactures battery and display materials like separators. The acquisition will make LG Chem a company that makes all four core components of batteries: cathodes, anodes, electrolytes and separators.
The acquisition includes all the manufacturing facilities the CEM division owns, which employee 800 working in and outside of the country. The CEM division currently operates three plants, one in Cheongju, North Chungcheong, one in Hangzhou, China and one in Wroclaw, Poland.
LG Chem will spend 6 trillion won by 2025 mainly on its battery materials business. The company plans to start construction of its new anode production plant in Gumi, North Gyeongsang, in December, which will have an annual capacity of 60,000 tons.
“The acquisition will allow the company to strengthen the value chain in the fast-growing battery materials business,” said LG Chem Vice Chair and CEO Shin Hak-cheol. “We will endeavor to become the world’s No. 1 battery materials company by actively promoting the separator business, as well as discovering new business opportunities that have high growth potential.”
BY SARAH CHEA [email@example.com]