SEOUL, July 29 (Korea Bizwire) – LG Chem Ltd., South Korea’s leading chemical firm, said Thursday its second-quarter net profit rose to the highest level ever on strong electric vehicle (EV) battery and petrochemical sales.
LG Chem’s net profit came to 1.6 trillion won (US$1.4 billion) in the April-June period, skyrocketing 289.5 percent from a year earlier, the company said in a regulatory briefing.
Operating profit jumped 290.2 percent on-year to 2.2 trillion won in the second quarter, and sales soared 65.2 percent on-year to 11.4 trillion won over the period, both marking record-high quarterly results, the firm said.
The operating profit was 116.3 percent higher than the average estimate, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
“The company posted the all-time high performance on strong growth in a wide range of businesses, including the petrochemical, battery materials and health care,” Chief Financial Officer Cha Dong-seok said during a conference call.
The mainstay petrochemical unit generated 5.3 trillion won of revenue with solid demand and higher margins, and the advanced material division logged 1.3 trillion won in sales with expanded production of cathode materials used in EV batteries, the firm said.
LG Energy Solution Ltd., the firm’s wholly-owned battery subsidiary, booked 5.1 trillion won in sales and 815.2 billion won in operating profit in the second quarter, driving up overall profits.
LG Energy said it expected sales growth in EV batteries and cylindrical battery products in the third quarter in line with brisk EV sales.
In regard to the latest recall on General Motors’ Chevrolet Bolt EVs equipped with its battery packs, LG Energy said it has been holding discussions with the American automaker to fix the problems.
The recall covers about 69,000 Bolts worldwide from 2017, 2018 and part of the 2019 model year.
“Consultations are currently underway over the detailed recall processes, and we will discuss how to share the bills,” Jang Seung-se, senior vice president of LG Energy Solution, said during a conference call.
To further expand its battery portfolio, LG Chem said it will take over LG Electronics Inc.’s battery separator business for 525 billion won.
Battery separators are one of the key components of lithium-ion batteries used in electric vehicles, which are important in preventing batteries from exploding in the charging process.
The latest acquisition is part of the chemical firm’s plan to invest 6 trillion won by 2025 to establish a wide battery supply chain.
Shares in LG Chem remained unchanged at 835,000 won on the Seoul bourse, underperforming the broader KOSPI’s 0.18 percent gain. The earnings results were released after the market closed.