LG Chem Reports Q4 Loss Amid Declining Demand
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Synopsis
LG Chem Ltd. reported a significant net loss in Q4 2024 due to a decline in demand for petrochemical and battery materials. The company's net loss reached ₩899.2 billion, coupled with lower sales and operating profits. To counteract the downturn, LG Chem plans reduced capital expenditures and aims to supply materials to a Japanese battery joint venture by 2026.
Key Takeaways
- LG Chem faced a net loss of ₩899.2 billion in Q4.
- The decline was due to reduced demand for petrochemical and battery products.
- Sales decreased by 6.1% year-on-year.
- Operating profit dropped to ₩916.79 billion, down 63.8%.
- Plans to invest ₩2 to 3 trillion in capital expenditure this year.
Seoul, Feb 3 (NationPress) LG Chem Ltd., the premier chemical company in South Korea, announced on Monday that it has experienced a net loss in the fourth quarter compared to the same period last year, primarily due to diminished demand for petrochemical and battery materials products.
The firm reported a net loss of 899.2 billion won ($613.3 million) for the three-month period ending in December, a significant drop from a net profit of 128.5 billion won a year prior, as detailed in a regulatory filing.
A company spokesperson stated, "The downturn in the core petrochemical sector, coupled with decreased demand for battery materials amidst the electric vehicle (EV) market challenges, negatively impacted the quarterly results."
LG Chem holds an 81.84 percent stake in LG Energy Solution Ltd., the leading battery manufacturer in the country, as reported by Yonhap news agency.
Additionally, the company reported an operating loss of 252 billion won for the December quarter, a stark contrast to an operating profit of 247.4 billion won from the previous year.
Sales during the quarter declined by 6.1 percent to 12.33 trillion won, down from 13.13 trillion won in the prior year.
For the entirety of 2024, net income fell by 74.9 percent to 515 billion won, down from 2.05 trillion won a year ago.
Operating profit fell sharply by 63.8 percent year-on-year, totaling 916.79 billion won, down from 2.52 trillion won. Total sales decreased by 11.5 percent to 48.9 trillion won, compared to 55.2 trillion won previously.
In response to the market decline, LG Chem intends to allocate 2 to 3 trillion won for capital expenditures this year, significantly reduced from the earlier announced 4 trillion won.
In September, LG Chem disclosed plans to provide cathode materials to Prime Planet Energy and Solutions (PPES), a Japanese battery joint venture between Toyota Motor and Panasonic.
LG Chem has secured PPES as a new client in line with its global expansion strategy, with plans to start supplying cathode materials to the Japanese firm in 2026.
In alignment with PPES' low-carbon objectives, LG Chem aims to concentrate on the development of innovative materials and processes that reduce environmental impact.
