LG Chem said on the 30th that first-quarter consolidation sales fell 2.6% on-year to 12.2468 trillion won, and it swung to an operating loss of 49.7 billion won.
By business institutional sector, the petrochemicals institutional sector posted sales of 4.4723 trillion won and operating profit of 164.8 billion won. Profitability improved from the previous quarter thanks to a positive inventory lagging effect from higher feedstock prices and a one-off recognition of revenue from refunds of European anti-dumping tariff.
The advanced materials institutional sector recorded sales of 843.1 billion won and an operating loss of 43.3 billion won. Sales in the advanced institutional sector rose on increased volumes of battery materials cathode materials and the launch of new semiconductor materials, and the deficit narrowed.
The life sciences institutional sector posted sales of 312.6 billion won and operating profit of 33.7 billion won. Sales decreased due to differences in export shipment timing from the previous quarter, but profitability increased as research and development and marketing expense declined.
Subsidiary Energy Solution posted sales of 6.555 trillion won and an operating loss of 207.8 billion won. Despite lower North American electric vehicle (EV) pouch volumes, sales rose as shipments of energy storage systems (ESS) increased and supply to cylindrical EV customers continued. However, it posted a loss due to the initial operating expense burden from expanding ESS production bases and a deteriorated product mix from reduced North American EV pouch volumes.
Subsidiary Farmhannong posted sales of 266.2 billion won and operating profit of 34.8 billion won. Along with expanded domestic sales of crop protection products, increased needs for pre-purchasing fertilizer due to the aftermath of the Middle East war boosted sales and profitability.
Cha Dong-seok, president of LG Chem, said, "Even amid uncertainty from unstable materials and supplies procurement, profitability improved from the previous quarter due to factors such as a positive inventory lagging effect from higher feedstock prices in the petrochemicals institutional sector and one-off recognition of revenue, and the companywide operating loss narrowed," adding, "Geopolitical risks in the Middle East and weak demand in the North American EV market will continue to pose external uncertainties, but we will accelerate a shift to a portfolio focused on high added value and high revenue to strengthen our fundamentals into a business structure that does not sway even in rapidly changing economic cycles."