LG : Chem posts highest-ever quarterly earnings

■ 1st Quarter Management Performance
□ Revenue: KRW 11.61 trillion (+20.4% YoY/+6.0% QoQ)
□ Operating profit: KRW 1.24 trillion (-27.3% YoY/+36.9% QoQ)

■ Even performance improvements over all business sectors due to increased shipments of premium products such as POE for solar panel encapsulation films and high nickel anode materials and cost reduction activities as a response to global inflation also contributed to the quarterly earnings.

■ Dong Seok Cha, Executive Vice President and CFO of LG Chem said
"Even under the harsh business environment, LG Chem achieved the highest-ever quarterly revenue and operating profit exceeding KRW 1 trillion. This is due to the company's long-term pursuit of business portfolio reorganization that focuses on high value-added products and strengthening of product competitiveness."
"The company expects revenue growth in the next quarter and will strive to generate sound profits by improving operational efficiency. This includes reducing costs, increasing sales price in accordance with rising raw material prices, strengthening product competitiveness, and improving customer satisfaction."

On the 27th, LG Chem announced that the company racked up revenue of KRW 11.61tn and operating profit of KRW 1.02tn in 1Q22.

Revenue reported +6.0% QoQ while operating profit reported +36.9% QoQ. On a yearly basis, the company reported +20.4% YoY in revenue and -27.3% YoY in operating profit.

Dong Seok Cha, Executive Vice President and CFO of LG Chem said, "Even under the harsh business environment, LG Chem achieved the highest-ever quarterly revenues and operating profits over KRW 1 trillion" and added

"The company expects revenue growth in the next quarter and will strive to generate sound profits by improving operational efficiency. This includes reducing costs, increasing sales price in accordance with rising raw material prices, strengthening product competitiveness, and improving customer satisfaction."

1Q22's performance breakdown for each business unit and 2Q22 projections are as follows:

The Petrochemicals Company reported revenue of KRW 5.96tn and operating profit of KRW 635bn. Under deteriorating external business environments including raw material price increases and lockdown in China, the company generated the highest-ever quarterly revenues and sound profitability based on its differentiated product portfolio that spans across POE(Poly Olefin Elastomer) for solar panel encapsulation films and SAP(Super Absorbent Polymer) for diapers.

2Q22 is likely to be an extended period accompanied by difficult business environments due to increased oil prices and sluggish demands. LG Chem, however, will continue its growth in both revenue and profitability by strengthening its sales activities focusing on high value-added products.

The Advanced Materials Company reported revenue of KRW 1.57tn and operating profit of KRW 154bn. The company achieved the highest-ever quarterly revenue by increasing the number of shipments for battery materials as well as for premium products including high-nickel cathode materials, OLED materials, and semiconductor materials.

In 2Q22, the company projects continued revenue growth with an expansion of business lines such as increased shipments of battery materials and advancements of premium products.

The Life Sciences Company reported revenue of KRW 217bn and operating profit of KRW 32.2bn. Sales of the company's major product lines including diabetes treatments and growth hormones continued to increase and led to higher YoY revenue and profitability.

The company projects continued solid revenue growth in 2Q22 with an increase of market share for its major product lines including diabetes treatment.

LG Energy Solution reported revenue of KRW 4.34tn and operating profit of KRW 259bn. Profitability improved compared to the previous quarter due to an expansion of metal-linked contracts, adjustments in sales prices, and higher productivity from process automation.

The company projects continued uncertainties in 2Q22 due to unstable supplies and demands in semiconductor sector and geopolitical risks, but its revenue from key accounts is expected to increase.

Farm Hannong reported revenue of KRW 261bn and operating profit of KRW 40.8bn. Revenue expanded due to increased exports of crop protection agents such as TERRAD'OR, which led to higher YoY revenue growth and profitability.

The company projects improvements in both yearly revenues and profitability from expansion of overseas sales for crop protection agents and conversion to high value-added seed businesses.

[Reference]

■ LG Chem 1Q22 Earnings(Consolidated) (Unit: KRW BN)

	`22.1Q	'21. 1Q	YoY	'21. 4Q	QoQ
Revenue	116,081	96,447	20.4%	109,487	6.0%
Operating Profit	10,243	14,095	△27.3%	7,484	36.9%

■ LG Chem 1Q22 Earnings (excluding LG Energy Solution) (Unit: KRW BN)

	`22.1Q	'21. 1Q	YoY	'21. 4Q	QoQ
Revenue	7,891	5,825	35.5%	6,849	15.2%
Operating Profit	818	1,089	△24.9%	657	24.5%