LG Chem (051910) Q2 2025 earnings summary

Executive summary

• Q2 and H1 2025 saw modest profitability improvements, mainly from Energy Solution and Life Sciences, despite a challenging environment with ongoing U.S. tariff disputes, cautious inventory policies, and subdued demand.

• Operating profit improved to KRW 477 billion in Q2 2025 (4.2% margin), with LG Energy Solution as the primary profit driver, offsetting losses in petrochemicals.

• Net income turned negative at KRW -112 billion in Q2 2025, and net loss attributable to owners was KRW -541.9 billion for H1 2025, impacted by non-operating items and discontinued operations.

Financial highlights

• Life Sciences segment returned to profitability in Q2 with KRW 337 billion revenue and KRW 25 billion operating profit, driven by strong vaccine, oncology, and autoimmune product sales.

• Energy Solution reported Q2 revenue of KRW 5.56 trillion and operating profit of KRW 492 billion (8.8% margin); H1 2025 revenue was KRW 11,824.3 billion with operating income of KRW 866.8 billion.

• Farm Hannong posted Q2 revenue of KRW 242 billion and KRW 13 billion operating profit, with profitability pressured by raw material costs.

• EBITDA reached KRW 1,715 billion (15.0% margin) in Q2 2025; cash and equivalents increased to KRW 8,385 billion.

• Petrochemicals posted Q2 sales of KRW 4,696 billion and an operating loss of KRW -90 billion; H1 2025 revenue was KRW 9,304.3 billion with an operating loss of KRW -146.9 billion.

Outlook and guidance

• Demand recovery is expected to be slow for petrochemicals and advanced materials, with continued headwinds from tariffs, policy changes, and cautious inventory management.

• Advanced Materials expects limited near-term battery material sales growth due to conservative inventory management and high U.S. tariffs, with significant volume growth anticipated in 2026 as new customer shipments ramp up.

• Life Sciences anticipates higher revenue and profit from rare obesity treatment out-licensing and will focus on oncology and global new drug development.

• Energy Solution projects increased cylindrical and ESS shipments in North America, with ongoing R&D and capacity expansion.

• Farm Hannong expects improved profitability in 2H 2025 from crop protection sales growth.