LG Chem’s 2023 OP down 15.1% on rising raw material costs

[Courtesy of LG Chem]

South Korea’s LG Chem Ltd. saw its operating profit fall by 15.1 percent in 2023 from a year ago amid the sluggish front industries and rise in raw material costs.

LG Chem said in its regulatory filing on Wednesday that its operating profit for 2023 totaled 2.53 trillion won ($1.9 billion), down 15.1 percent from a year ago.

Revenue gained 8.4 percent on year to 55.2 trillion won.

By business, LG Chem’s petrochemical division swung to an operating loss of 14.3 billion won in 2023 on sales of 17.8 trillion won, down 18 percent from a year ago.

The weak performance came on continued sluggish demand in the construction and home appliance industries and rising raw material prices, the company said.

The advanced materials division posted an operating profit of 58.5 billion won in 2023, down 36.6 percent from a year ago, on sales of 7.4 trillion won, up 4.2 percent.

The weak profitability is likely due to the continued slow demand for electric vehicles in Europe and a decline in metal prices.

The life sciences division achieved an operating profit of 2.9 billion won, down 60.8 percent, on sales of 1.2 trillion won, up 33.3 percent, during the same period.

Samsung Electro-Mechanics Co., in the meantime, saw both its sales and operating profit rise in the fourth quarter of last year, thanks to the effects of new smartphone product releases.

The company announced Wednesday that it posted an operating profit of 110.4 billion won in the October-December period, up 9 percent from the same period a year ago. Revenue stood at 2.3 trillion won, up 17 percent.

From the previous quarter, however, revenue fell 2 percent and operating profit was down 40 percent.

Hyundai Wia Corp. continued its upward trend in sales and operating profit last year, driven by strong sales of sport utility vehicles and other finished cars.

The company disclosed Wednesday that it recorded an operating profit of 229.2 billion won in 2023, up 8.1 percent, on sales of 8.6 trillion won, up 4.7 percent.