Seoul: LG Chem Ltd., South Korea's leading chemical company, announced a significant 23.8 percent decrease in its first-quarter net profit, attributing the decline to increased manufacturing costs driven by a weak local currency. The company's net profit for the three-month period ending in March fell to 260.4 billion won (US$183.3 million), compared to 341.69 billion won a year earlier, as stated in a regulatory filing.
According to Yonhap News Agency, the depreciation of the won against the dollar has led to a rise in the import prices of raw materials, exacerbating the ongoing downturn in the petrochemical industry. Despite this, LG Chem reported a substantial 68.9 percent increase in operating profit, which rose to 447 billion won in the first quarter, up from 265 billion won in the same period last year.
The company attributed the improvement in operating profit to strong sales of high-end electronic and engineering materials, as well as increased equity gains from its battery affiliate, LG Energy Solution Ltd. In response to the current challenges, LG Chem plans to reorganize its portfolio, prioritizing high-growth, high-margin sectors while continuing efforts to mitigate losses in the petrochemical business.
Furthermore, LG Chem saw a 4.8 percent increase in sales, reaching 12.17 trillion won compared to 11.61 trillion won during the same timeframe last year.