SEOUL, Jan. 27 (Korea Bizwire) — LG Chem Ltd., South Korea’s leading chemical firm, said Wednesday it posted a record revenue in 2020 on strong battery sales, vowing to expand its battery unit’s production capacity to meet growing demand for electric vehicle (EV) batteries.
Its annual sales rose 9.9 percent to 30.6 trillion won (US$278.6 billion) in 2020, surpassing the threshold for the first time, the company said in a regulatory briefing.
For the whole of 2020, the net profit jumped 188.9 percent on-year to 1.1 trillion won, and the operating profit soared 185.1 percent to 2.3 trillion won, it said.
LG Chem launched its battery unit, LG Energy Ltd., in early December to expand its lucrative battery business and grab a bigger chunk of the EV battery market.
“In 2020, both the company’s sales and profits grew despite the COVID-19 pandemic,” Chief Financial Officer Cha Dong-seok said in a conference call.
“In the fourth quarter, the company successfully launched its battery division to strengthen its growth competitiveness.”
In the fourth quarter, LG Chem said its net profit came to 60.6 billion won, turning from a loss of 56.8 billion won a year earlier.
Operating profit reached 673.6 billion won in the October-December period, also swinging from a loss of 33.4 billion won a year ago, which was largely due to one-off costs related to energy storage systems (ESS).
Sales grew 19.9 percent on-year to 8.9 trillion won in the last quarter, marking record-high quarterly revenue, it said.
LG Chem said it aims to generate 37.3 trillion won in sales in 2021 by focusing on its core businesses, including petrochemicals, materials, batteries and health care.
The company said it will develop new materials for batteries and expand production capacity to meet growing demand for EVs, OLED screens, IT products and materials for e-mobility.
Company officials said LG Energy Solution’s revenue is expected to jump over 50 percent this year as major countries are expanding subsidies for EVs and renewable energy solutions, which would require ESS for stable power supply.
“To grow beyond a battery supplier, the company will develop next-generation batteries and establish a value chain to provide various solutions,” Jang Seung-se, a senior vice president at LG Energy Solution, said.
LG Energy Solution is a major supplier of batteries for nearly all major global carmakers, including Tesla, General Motors, Ford, Renault, Volvo and Volkswagen, as well as South Korea’s two largest automakers — Hyundai Motor and Kia Corp.
The battery maker is expected to be listed on the stock market to secure funds for production capacity expansion, but company officials did not elaborate on its initial public offering plan.
Shares in LG Chem fell 2.83 percent to 928,000 won on the Seoul bourse, underperforming the broader KOSPI’s 0.57 percent slide. The earnings results were released after the market closed.