LG Chem third-quarter revenue jumps 34 percent as operating profit falls 17 percent

LG Chem said Thursday its third-quarter revenue rose 34 percent from a year earlier to 15.5 trillion won ($11.6 billion), even as it swung to a pre-tax loss from continuing operations of 646 billion won from a 457 billion won profit a year earlier.

Operating profit fell 17.4 percent to 561 billion won ($418 million) from 680 billion won a year earlier. Revenue was up 9.3 percent from the second quarter. The company said margins would come under further pressure in the period, citing a negative lagging effect from declining raw material prices and higher logistics costs.

The revenue result was driven by LG Energy Solution, the group's battery subsidiary, which reported third-quarter revenue of 9.64 trillion won, up 59 percent on-year, and operating profit of 756 billion won, up 25.7 percent. The unit booked 417 billion won in North American production incentives, including credits under the U.S. Inflation Reduction Act.

"Third-quarter company-wide revenue rose 28 percent from the previous quarter, as both EV pouch and cylindrical products grew on a volume basis alongside a sharp increase in ESS shipments," said Lee Chang-sil, vice president and chief financial officer of LG Energy Solution. "For profit and loss, improved utilization at the Poland plant, continued cylindrical product supply volumes and productivity gains at new ESS mass-production sites were reflected in the 756 billion won operating profit."

Battery operations accounted for 53.4 percent of first-half revenue by business segment, followed by petrochemicals at 36.5 percent, advanced materials at 5.6 percent and life sciences at 2.6 percent, the company said.