LG Chem Swings to Loss in Q4 on One-off Costs

LG Chem’s factory in Cheongju, North Chungcheong Province. (image: LG Chem)

SEOUL, Feb. 3 (Korea Bizwire) — LG Chem Ltd., South Korea’s leading chemicals firm, said Monday that it swung to a loss in the fourth quarter from a year earlier due to one-off costs related to energy storage systems (ESS).

The net loss stood at 56.8 billion won (US$47.5 million) in the three months that ended Dec. 31 from a net profit of 126.5 billion won a year earlier, the company said in a regulatory filing.

A company spokesman said one-off costs related to safety measures following a series of fires in ESS are to blame for the net loss in the fourth quarter.

ESS refers to energy saving procedures in large batteries for the efficient distribution of power.

The company posted an operating loss of 27.5 billion won in the fourth quarter, shifting from an operating profit of 289.5 billion won a year earlier.

Sales rose 1.6 percent on-year to 7.46 trillion won in the fourth quarter.

For the whole of 2019, LG Chem’s net profit stood at 376 billion won, down 75.2 percent from 1.51 trillion won in the previous year.

LG Chem said it aims for a 23.4-percent rise in this year’s sales to 35.3 trillion won, compared with 28.6 trillion won in 2019.

The company said it plans to spend 6 trillion in capital expenditure for this year, down 13 percent from 2019.

LG Chem said it has stopped the operation at some of its plants in China amid the spreading coronavirus outbreak.

Shares in LG Chem rose 3.7 percent to 350,000 won, outperforming the broader KOSPI’s 0.01 percent decline.

(Yonhap)