Seoul: LG Chem Ltd., South Korea's leading chemical company, reported a significant decline in its third-quarter net profit, which more than halved compared to the previous year, primarily due to a base effect. The company's net income for the July-September period amounted to 447.3 billion won (US$314 million), marking a 55.8 percent decrease from the same period last year, as revealed in a regulatory filing.
According to Yonhap News Agency, despite the drop in net profit, LG Chem's operating profit saw a substantial increase of 38 percent year-on-year, reaching 679.7 billion won from the previous 489.5 billion won. However, sales experienced a decrease of 11.3 percent, totaling 11.19 trillion won for the quarter.
The company's earnings surpassed market expectations, with analysts having estimated an average net profit of 182.5 billion won, based on a survey conducted by Yonhap Infomax, the financial data firm of Yonhap News Agency. The sharp decline in net income was attributed to a base effect caused by one-off gains from the sale of its non-core polarizing plate materials business in September of the previous year.
LG Chem's petrochemical division, which is a core segment of the company, reported a slight decrease in sales to 4.5 trillion won. This was due to increased tariff costs and weakening demand, resulting in an operating profit of 29.1 billion won.