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(LEAD) LG Chem Q1 sinks 83 pct on currency losses

All News 09:48 April 28, 2020

(ATTN: UPDATES with company's comments and details; ADDS photo)

SEOUL, April 28 (Yonhap) -- LG Chem Ltd., South Korea's leading chemical firm, said Tuesday that its net profit tumbled 83 percent in the first quarter from a year earlier due to currency-related losses.

Net income came in at 36.3 billion won (US$30 million) in the January-March period, a sharp decline from last year's first-quarter net profit of 212 billion won, the company said in a regulatory filing.

LG Chem said the won's weakness against the euro is mainly to blame for the sharp decline in net profit, adding that it borrowed a lot of euros in the first quarter.

This undated file photo shows LG Chem's factory in Cheongju, North Chungcheong Province. (Yonhap)

Sales rose 7.5 percent on-year to 7.11 trillion won, and operating profit dropped 15.9 percent on-year to 236 billion won.

The company said its petrochemical business unit logged an operating income of 242.6 billion won in the first quarter on sales of 3.69 trillion won.

But its battery unit suffered an operating loss of 51.8 billion won on sales of 2.26 trillion won due to new investments in electric vehicle (EV) batteries and the suspension of plants over the spreading novel coronavirus.

LG Chem said it expects sales in its battery unit to go up in the second quarter due to increased output of EV batteries and cylindrical batteries.

Cha Dong-seok, chief financial officer at LG Chem, said the company's efficiency would improve and it would continue to make investments for future growth, though there could be uncertainties over the COVID-19 pandemic and falling oil prices.

entropy@yna.co.kr
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