(2nd LD) LG Chem Q2 net profit jumps 5 times on EV battery output

(ATTN: UPDATES with details in paras 5, 7-12)

SEOUL, July 31 (Yonhap) -- LG Chem Ltd., South Korea's leading chemical firm, said Friday that its second-quarter net profit jumped five times from a year earlier on the back of improved production of electric vehicle (EV) batteries.

Net profit reached 419.1 billion won (US$352 million) in the April-June period, compared with 83.8 billion won a year earlier, the company said in a regulatory filing.

LG Chem said its EV battery plant in Poland began to produce products in a stable manner as the defect rate declined, which in turn improved its bottom line.

LG Chem also operates electric vehicle battery plants in South Korea, China and the United States.

Cha Dong-seok, chief financial officer at LG Chem, said the company's improved efficiency led to the forecast-beating earnings, despite the fallout of the COVID-19 pandemic.

LG Chem said its operating income surged 131.5 percent on-year to 571.6 billion won, and sales rose 2.3 percent to 6.93 trillion won over the cited period.

LG Chem said its battery business unit achieved an operating income of 155.5 billion won in the second quarter on quarterly record sales of 2.82 trillion won.

Cha said the EV battery business unit could continue to post sharp growth in the current quarter due to increased shipments of EV batteries to Europe and increased sales of cylindrical batteries.

LG Chem is a key supplier of batteries to electric vehicles, including those of GM, Ford, Renault, Volvo, Audi, Volkswagen and Daimler, as well as South Korea's largest carmaker, Hyundai Motor Co., and its smaller affiliate, Kia Motors Corp.

LG Chem said it is on track to boost its production capacity to 100 gigawatt hours by the end of this year, which is enough to supply batteries for about 1.7 million electric cars.

LG Chem said its order backlog for EV batteries is currently valued at more than 150 trillion won.

The EV battery market has been on a roll as automakers around the world race to go electric and eco-friendly due to tightened regulations on greenhouse gas emissions, which scientists say are to blame for global warming.

entropy@yna.co.kr
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