Vice Chairman Park Jin-soo of LG Chem. (Photo: LG Chem)

LG Chem said its second quarter sales this year surpassed 7 trillion won. It’s the first time in its history that the company broke the 7 trillion won barrier in quarterly sales, with consolidated sales figures coming to 7.051 trillion won, up 10.5 percent YoY.

But the 703.3 billion won operating profit in the quarter is a decline of 3.2 percent YoY.

President Chung Ho-yong and the chief financial officer, said the superb performance has been owed to brisk sales of EV batteries and high-value added basic raw materials, despite high prices of the raw materials. The basic raw materials sector registered sales of 4.671, 2 trillion won in the quarter, the largest ever recorded for a quarter with operating profit coming to 704.5 billion won, up 2.7 percent YoY.

Officials of the chemical company said raw materials prices were strong, but the products benefitted from a high consumption season and helped by strong sales of downstream products.

The sales of EV batteries amounted to 1.494 trillion won in the Q2 with operating profit coming to 270 billion won. Sales of auto batteries, the growth of the ESS market, and increases in the sales of flashlight batteries helping to boost Q2 sales.

Life science sector sales came to 150.9 billion won, with operating profit coming to 158 billion won, up 19.7 percent YoY.
The sales of electronic information materials came to 764.6 billion won, with operating profit down 219 billion won in losses.

President Chung said the company is likely to maintain its superb performance in the third quarter, with sales of EV batteries and the improved business structure of the basic raw materials doing their shares to keep the sales up.

LG Chem Ltd., South Korea's biggest chemical company by sales, said July 24 that its second-quarter net profit fell 16.4 percent from a year earlier due to the strength of the won and a hike in oil prices.
Net profit reached 493.3 billion won ($434 million) in the April-June period, compared with 590 billion won a year earlier, the company said in a regulatory filing.

LG Chem said its operating income fell 3.2 percent on-year to 703.2 billion won, but sales jumped 10.5 percent to a quarterly record of 7.05 trillion won over the cited period. Jeong Ho-young, chief financial officer at LG Chem, said the solid performance was driven by increased sales of high-end products in basic materials and chemicals and by record-high sales in its battery unit, despite rising costs of raw materials.

The company said its basic materials-related business unit logged an operating income of 704.5 billion won in the second quarter on sales of 4.67 trillion won.

It added that the battery unit achieved an operating profit of 27 billion won on sales of 1.49 trillion won due to brisk sales of batteries used in electricity vehicles and growth of energy storage system in South Korea.

LG Chem is a key supplier of batteries to U.S. auto giant General Motors, European companies Volvo and Renault, as well as South Korea's largest carmaker, Hyundai Motor Co., and its smaller affiliate, Kia Motors Corp. LG Chem operates electric vehicle battery plants in South Korea, China and the United States.

Jeong said LG Chem will continue to post robust results in the third quarter, helped by increasing sales of car batteries and basic materials, despite uncertainties in oil prices, foreign-exchange rates and global trade disputes. LG Chem announced its plan to invest 2.8 trillion won to expand its local naphtha cracking center and polyolefin plant by 2021. The company will spend 2.6 trillion won to increase output capacity of the NCC and the PO plant in Yeosu, 455 kilometers southwest of Seoul, by 800,000 tons each. It will inject the remaining 200 billion won into a "future materials" production facility in Dangjin, 120 km south of Seoul.