LG Chem (051910) Q4 2024 earnings summary

Executive summary

• 2024 was marked by global oversupply in petrochemicals, weak EV demand, and a slowdown in sales and profitability, with consolidated sales at KRW 48.9tn, down from KRW 55.2tn in 2023, and net income dropping to KRW 515bn from KRW 2,053bn.

• Operating profit margin fell to 1.9% from 4.6% YoY, with a net loss in Q4 2024 due to one-off costs and weak demand in key segments.

• The company streamlined marginal operations, divested non-core assets, and expanded high-value-added pipelines in each business segment.

• Strategic priorities for 2025 include accelerating portfolio restructuring, strengthening growth drivers, and maximizing R&D commercialization through open innovation.

• Restructuring focused on high-value products, cost reduction, and divestment of low-growth businesses.

Financial highlights

• Q4 2024 sales were KRW 12.3tn, with an operating loss of KRW 252bn and net loss of KRW 899bn.

• Full-year 2024 sales were KRW 48,900 billion, down 11% YoY; operating profit was KRW 917 billion, also down YoY.

• Full-year EBITDA was KRW 5.6tn (11.4% margin), down from KRW 6.5tn (11.7%) in 2023.

• Cash and equivalents at year-end were KRW 8.1tn, with net debt/equity at 31.2%.

• Dividend per share set at KRW 1,000–1,051 despite no distributable profit, reflecting commitment to shareholder returns.

Outlook and guidance

• 2025 sales target (excluding energy solution) is set at KRW 26,500 billion, subject to market conditions.

• Modest sales growth expected in Life Sciences and Farm Hannong, with slight declines in Petrochemicals and Advanced Materials.

• Strategic focus on high-growth, high-profitability applications, prudent investment in sustainability and battery materials, and performance-based R&D.

• CapEx for 2025 expected at the upper end of KRW 2 trillion, with mid- to long-term CapEx plans adjusted down to KRW 2–3 trillion.

• Profitability improvements expected from easing raw material costs and favorable exchange rates.