LG Chem returns to OP in Q4, posts record high annual sales in 2020

South Korea’s LG Chem Ltd. posted record high annual sales in 2020 thanks to the strong performance of its battery business unit and soaring demand for petrochemical products in the latter half of last year.

In its regulatory filing on Wednesday, LG Chem announced its consolidated operating profit for the October to December period last year totaled 673.6 billion won ($609.8 million), down 25.3 percent from the previous quarter but swinging to profit from operating loss a year ago.

Revenue gained 18.4 percent on quarter and 19.9 percent on year to 8.9 trillion won. Net income plunged 89.4 percent on quarter due to the non-business factors but returned to profit to from the previous year to 60.6 billion won.

For the full 2020, its operating profit surged 185.1 percent from a year ago to 2.35 trillion won.

Annual sales hit an all-time high of 30.05 trillion won, up 9.9 percent on year. Net profit soared 188.9 percent to 1.09 trillion won.

LG Chem shares closed 2.83 percent down at 928,000 won on Wednesday.

Its stand-alone battery making unit LG Energy Solution posted 116 billion won in operating profit for the fourth quarter, down 31.4 percent from the previous quarter due to the negative foreign exchange impact and one-off cost, the company said. Sales reached 4.13 trillion won over the previous three months.

LG Chem said its sales for this year are projected to grow 24.1 percent on year to 37.3 trillion won. Sales of LG Energy Solution is expected to grow 50 percent this year, benefitting from expanding lineups of electric vehicles of global auto makers and increasing overseas order for its energy storage system (ESS).

“Despite the Covid-19 crisis, the company’s annual sales grew 10 percent from a year ago to exceed 30 trillion won for the first time,” LG Chem’s chief financial officer (CFO) Cha Dong-seok said. “We will focus our capacity on four major areas – battery materials, sustainability solution, e-mobility materials and new drug development – as well as new growth engines to take a leap forward this year.”

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