SEOUL, Oct. 12 (Korea Bizwire) — LG Chem Ltd., South Korea’s leading chemical firm, said Monday its operating profit hit a quarterly record high in the third quarter amid robust sales at the petrochemical and electric vehicle (EV) battery units.
In its earnings guidance, the South Korean electric vehicle battery maker estimated its operating profit at 902 billion won (US$785 million) in the July-September period, up 158.7 percent from a year earlier.
The third-quarter operating income estimate beats the market consensus of 732.8 billion won in the data compiled by Yonhap Infomax, the financial arm of Yonhap News Agency.
Robust sales in the petrochemical and EV battery units helped the company continue to report a larger-than-expected profit in the third quarter.
LG Chem’s sales also hit a quarterly record high of 7.5 trillion won in the third quarter, the company said, without providing a net result for the third quarter in the guidance.
The company has said its EV battery plant in Poland began to produce products in a stable manner as the defect rate declined, which in turn improved its bottom line.
LG Chem also operates electric vehicle battery plants in South Korea, China and the United States.
In July, LG Chem’s battery business unit achieved an operating income of 155.5 billion won in the second quarter on quarterly record sales of 2.82 trillion won.
Cha Dong-seok, chief financial officer at LG Chem, said in July that the EV battery business unit could continue to post sharp growth in the third quarter due to increased shipments of EV batteries to Europe and increased sales of cylindrical batteries.
LG Chem is a key supplier of batteries to electric vehicles, including those of GM, Ford, Renault, Volvo, Audi, Volkswagen and Daimler, as well as South Korea’s largest carmaker, Hyundai Motor Co., and its smaller affiliate, Kia Motors Corp.
LG Chem said it is on track to boost its production capacity to 100 gigawatt hours by the end of this year, which is enough to supply batteries for about 1.7 million electric cars.
LG Chem said its order backlog for EV batteries is currently valued at more than 150 trillion won.
The EV battery market has been on a roll as automakers around the world race to go electric and eco-friendly due to tightened regulations on greenhouse gas emissions, which scientists say are to blame for global warming.
LG Chem is scheduled to release its third-quarter net result on Oct. 21.
Shares in LG Chem fell 2.89 percent to 672,000 won, underperforming the broader KOSPI’s 0.49 percent gain.