LG Chem posts 1Q management performance
■ Management performance for 1Q (consolidated)
□ Revenue: KRW 14.49 trillion (+24.9% YoY)
□ Operating profit: KRW 791 billion (-22.8% YoY)
■ Despite the uncertainty in the business environment extending into 2Q, a gradual increase in demand for Petrochemical Company, as well as a robust growth trajectory for both the Advanced Materials Company and Energy Solution is anticipated
On the 27th, LG Chem announced that the company recorded a consolidated ▲revenue of KRW 14.49 trillion and ▲ operating profit of KRW 791 billion in 1Q.
Although the revenue grew by 24.9% YoY, the company’s operating profit decreased by 22.8%.
Excluding LG Energy Solution, LG Chem posted a revenue of KRW 7.53 trillion and an operating profit of KRW 141 billion.
In relation to its quarterly performance, LG Chem has announced that it achieved “higher revenue and profitability on a quarter-on-quarter basis across all its businesses, despite the global economic downturn.” The company further stated that “although there’s uncertainty in the business environment extending into 2Q, the company anticipates a gradual increase in demand for the Petrochemicals Company, as well as a strong growth trajectory for both the Advanced Materials Company and Energy Solution.”
Examining the specifics of 1Q performance per company and 2Q outlook,
Petrochemicals Company recorded a revenue of KRW 4.58 trillion and operating loss of KRW 50.8 billion. Despite the worldwide economic slowdown, which caused contraction in the home appliances and construction sectors and weakened demand for its key products, the company was able to reduce its quarter-on-quarter deficit range. This was achieved after successful regular maintenance during 4Q, which led to an increase in utilization rate.
Despite oversupply in the upstream market, a gradual improvement in the market is expected in 2Q, including a recovery in demand as high season approaches.
Advanced Materials Company posted a revenue of KRW 2.56 trillion and operating profit of KRW 203 billion. The company experienced a significant increase in revenue and profitability of its key products as demand for battery materials picked up on a quarter-on-quarter basis.
Although a sluggish trend in metal prices may impact the revenue and profitability of battery materials in 2Q, the company plans to maintain strong profitability by implementing inventory management strategies and expanding sales of high-value-added IT and semiconductor materials.
Life Sciences Company posted a revenue of KRW 278 billion and operating profit of 16.4 billion. With strong sales of its key products, such as growth hormones and vaccines, the company benefited from a demand recovery in the aesthetics business and reflection of AVEO’s consolidated performance. As a result, all have led to revenue growth on a quarter-on-quarter basis.
The company expects a growth trajectory in 2Q driven by the launch of new diabetes treatment and revenue growth in key products. Additionally, the company will continue its research and development efforts for new drugs, as global clinical trials are currently underway."
LG Energy Solution announced a revenue of KRW 8.74 trillion and operating profit of KRW 633 billion. The company’s upward growth trend continued as electric vehicle battery’s shipments increased in North America and higher selling prices. Moreover, higher yields and tax benefits from the US IRA contributed to an uptick in operating profit.
In 2Q, the company forecasts a solid demand centered around North America, and expects to secure tax benefits with advanced local production capability in the US and stable mass production.
Farm Hannong announced a revenue of KRW 265.4 billion and operating profit of KRW 34.1 billion. The company's year-on-year revenue growth was driven by an increase in both domestic and overseas sales of crop protection chemicals. The company predicts an increase in annual revenue and improved profitability by expanding the overseas sales of its crop protection chemicals and reforming the business structure of its seed and fertilizer business.