LG Chem (051910) Q2 2026 earnings summary

Executive summary

• Q2 2026 consolidated sales reached KRW 14.176 trillion, up from KRW 12.247 trillion in Q1, with operating profit at KRW 600 billion and net profit at KRW 67 billion, achieving a 4.2% operating margin.

• Profitability improved in Petrochemicals, LG Energy Solution, and Advanced Materials, with Life Sciences and Farm Hannong also returning to profitability.

• Net income turned positive after two consecutive quarters of losses.

• Revenue growth was driven by Energy Solution and Advanced Materials.

• Market uncertainty persists due to geopolitical risks and raw material price volatility, but efforts continue to optimize production, sales, and cost competitiveness.

Financial highlights

• Q2 2026 assets: KRW 112.2 trillion; liabilities: KRW 63.3 trillion; capital: KRW 48.9 trillion.

• Gross margin improved to 21.1% in Q2 2026 from 18.9% in Q1 2026.

• EBITDA rose to KRW 2.206 trillion in Q2 2026, up from KRW 1.442 trillion in Q1 2026.

• Cash and equivalents increased to KRW 12.696 trillion at quarter-end.

• Debt ratio/liabilities-to-equity rose to 129.6% in Q2 2026.

Outlook and guidance

• Q3 profitability in Petrochemicals expected to decline due to negative inventory lagging effects and higher logistics costs.

• Energy Solution expects continued revenue growth from North American ESS expansion and steady EV shipments.

• Advanced Materials expects growth from new cathode material customers, increased ESS separator volumes, and solid electronics materials performance.

• Life Sciences and Farm Hannong profitability projected to decline in Q3 due to shipment timing, increased R&D, and raw material costs.

• Separator business expects 40% YoY growth in 2026, with ESS accounting for 60-70% of revenue; further strong growth anticipated in 2027.