LG Chem Ltd.’s factory in the southwestern city of Iksan is seen in this photo provided by the company.
SEOUL, April 27 (Korea Bizwire) — LG Chem Ltd. said Thursday its first operating quarter profit shrank 22.8 percent from a year earlier as a global economic slowdown dampened petrochemical demand in major industries.
Operating profit reached 791 billion won (US$592 million) in the January-March period, compared with 1.02 trillion won the previous year, the Seoul-based chemical company said in a regulatory filing.
Revenue increased 24.9 percent to 14.48 trillion won.
Net income fell 13 percent on-year to 669.1 billion won.
The earnings beat market expectations. The average estimate of net profit by analysts stood at 421.1 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
The weaker bottom line came as the petrochemical sector suffered an operating loss amid faltering demand for electronics and construction materials, LG Chem said.
The segment booked an operating loss of 50.8 billion won, with the revenue coming in at 4.58 trillion won in the first quarter.
“We believe uncertainties in the macro-environment will persist in the second quarter, but expect the petrochemical demand will gradually recover and continue to post solid growth in advanced materials and energy solution units,” LG Chem said.
LG Chem is the parent company of LG Energy Solution Ltd. (LGES), the world’s second-largest battery manufacturer.
Excluding LGES’ profit, LG Chem logged 141 billion won in operating income for the three months.
Its advanced materials business, mainly engaged in electronics materials like IT and semiconductor components, posted 202.7 billion won in operating profit and 2.56 trillion won in revenue.
The life science division in charge of developing drugs reported 16.4 billion won in operating profit and 278 billion won in revenue.
Farm Hannong, its agricultural chemicals affiliate, posted 34.1 billion won in operating profit, with revenue of 265.4 billion won.
Shares in LG Chem closed up 1.93 percent to 741,000 won on the main Seoul bourse Thursday, outperforming the broader KOSPI’s 0.44 percent gain. The earnings results were released before the market opened.
(Yonhap)
