LG Chem has posted 576.1 billion won in operating profits and 6.9352 trillion won in sales in the second quarter of 2020, the company said on Friday.
It is a rise of 131.5% and 2.3%, respectively, from the same time period a year ago. LG Chem said its operating margin rate was 8.2%, which was its highest since the third quarter of 2018.
The performance bests South Korean analysts’ consensus of 410 billion won in operating profits for the quarter.
LG Chem said its differentiated efficiency management and product spread improvement for its petrochemical business, coupled with the highest ever performance from its electric vehicle (EV) battery business propelled its second quarter earnings.
The petrochemical business posted operating profits of 434.7 billion won and sales of 3.3128 trillion won. Sales were hurt by the decline in oil prices but recovery in the Chinese market and efficient management helped the business clinch an operating margin rate of 13.1%.
Third quarter results for the business is expected to improve as the global economy begins its recovery from the COVID-19 pandemic.
The batter business marked 155.5 billion won in operating profits and 2.823 trillion won in sales, its highest ever for a quarter for both figures. EV sales in Europe and China thanks to the global trend of promoting eco-friendly policies as well as larges-scale energy storage systems in North America helped sales increase 25% from the previous quarter. These trend are expected to continue to the third quarter to help earnings, LG Chem said.
The business also improved the yield rate at its battery plant in Poland. Overall improvement in productivity and cost cutting efforts helped the business turn a profit.
LG Chem’s material business marked 35 billion won operating profits and 789.2 billion won in sales in the quarter. Its bioscience business marked 14.1 billion won in operating profit and 160.3 billion won in sales. Its farming subsidiary, Farm Hannong, posted 11.6 billion won in operating profits and 177.8 billion won in sales.