LG Chem (051910) Q4 2024 earnings summary

Executive summary

• 2024 was marked by global oversupply in petrochemicals, weak EV demand, and a slowdown in key markets, resulting in a decline 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.

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 48.9tn, down 11% YoY; operating profit was KRW 917bn, and EBITDA was KRW 5.6tn (11.4% margin), both down YoY.

• 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 (common) and KRW 1,051 (preferred) despite no distributable profit, reflecting commitment to shareholder returns.

• 2024 CapEx (excluding Energy Solution) was KRW 2.4tn; R&D expenses totaled KRW 1.1tn.

Outlook and guidance

• 2025 sales target (excluding energy solution) is set at KRW 26.5tn, with modest growth expected in Life Sciences and Farm Hannong, and 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 2tn, with mid- to long-term CapEx plans adjusted down to KRW 2–3tn.

• Profitability expected to improve as raw material and freight costs ease, but global demand uncertainty remains.

• Continued efforts to generate positive cash flow and maintain financial soundness.