SEOUL — LG Chem Ltd., South Korea's top chemical company, reported on Monday an 18 percent drop in its third-quarter net profit. The decline was attributed primarily to lackluster sales in petrochemical products amid economic deceleration.
According to Yonhap News Agency, net profit for the quarter ending in September fell to 585.04 billion won (US$433 million), compared to 713.87 billion won in the same period last year. A company spokesman stated that despite equity gains from LG Energy Solution, weak sales in petrochemical products and decreased battery material shipments to Europe weighed on the company's bottom line.
LG Energy Solution Ltd., a wholly owned battery subsidiary of LG Chem, reported robust third-quarter earnings last week. The unit's net profit more than doubled to 420.5 billion won, up from 187.7 billion won, buoyed by strong demand in the United States and tax credits provided under the U.S. Inflation Reduction Act (IRA). The IRA offers up to $7,500 in tax credits for buyers of electric vehicles assembled in North America, using minerals sourced and processed either in the U.S. or in countries with free trade agreements with Washington.
For the third quarter, LG Chem's operating profit fell 5.6 percent to 860.42 billion won, down from 911.38 billion won a year ago. Sales also declined by 3.5 percent, standing at 13.49 trillion won as opposed to 13.98 trillion won in the same period the previous year.
From January to September, the chemical company's net income dropped 13 percent year-on-year to 1.92 trillion won. During this period, operating profit plunged 18 percent to 2.28 trillion won, while sales increased by 13 percent to 42.11 trillion won.