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LG Chem posts Q3 op profit on strong petchems earnings

October 13/2020

MOSCOW (MRC) -- LG Chem Ltd., South Koreas leading chemical firm, said Monday its operating profit hit a quarterly record high in the third quarter amid robust sales at the petrochemical and electric vehicle (EV) battery units, said Koreabizwire.

In its earnings guidance, the South Korean electric vehicle battery maker estimated its operating profit at 902 billion won (USD785 million) in the July-September period, up 158.7 percent from a year earlier. The third-quarter operating income estimate beats the market consensus of 732.8 billion won in the data compiled by Yonhap Infomax, the financial arm of Yonhap News Agency.

Robust sales in the petrochemical and EV battery units helped the company continue to report a larger-than-expected profit in the third quarter. LG Chems sales also hit a quarterly record high of 7.5 trillion won in the third quarter, the company said, without providing a net result for the third quarter in the guidance.

The company has said its EV battery plant in Poland began to produce products in a stable manner as the defect rate declined, which in turn improved its bottom line. LG Chem also operates electric vehicle battery plants in South Korea, China and the United States.

In July, LG Chems battery business unit achieved an operating income of 155.5 billion won in the second quarter on quarterly record sales of 2.82 trillion won. Cha Dong-seok, chief financial officer at LG Chem, said in July that the EV battery business unit could continue to post sharp growth in the third quarter due to increased shipments of EV batteries to Europe and increased sales of cylindrical batteries.

LG Chem is a key supplier of batteries to electric vehicles, including those of GM, Ford, Renault, Volvo, Audi, Volkswagen and Daimler, as well as South Koreas largest carmaker, Hyundai Motor Co., and its smaller affiliate, Kia Motors Corp.

LG Chem said it is on track to boost its production capacity to 100 gigawatt hours by the end of this year, which is enough to supply batteries for about 1.7 million electric cars. LG Chem said its order backlog for EV batteries is currently valued at more than 150 trillion won.

The EV battery market has been on a roll as automakers around the world race to go electric and eco-friendly due to tightened regulations on greenhouse gas emissions, which scientists say are to blame for global warming. LG Chem is scheduled to release its third-quarter net result on Oct. 21.

As MRC informed earlier, LG Chem signed a conditional contract with Ningbo, China-based Ningbo Shanshan to sell a large portion of its liquid crystal display (LCD) polarizer business for USD1.1 billion. The sale reflects LG's strategy of exiting from the LCD business as cut-price Chinese electronics makers, such as Beijing-based BOE Technology, dominate the business.

Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
Author:Anna Larionova
Tags:PP, PE, ethylene, propylene, LG Chem.
Category:General News
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