LG Chem said Tuesday that its 2022 revenue surged 21.8 percent year-on-year to a record 51.9 trillion won ($42 billion) while operating profit plunged 40.4 percent to 3 trillion won.
A 1.2 trillion won operating profit achieved last year by the company's battery manufacturing unit, LG Energy Solution (LGES), was not enough to stem the decline in earnings.
The company's petrochemical business suffered a 166 billion won operating loss during the fourth quarter of last year which it attributed to its plant turnaround and a strike by unionized cargo truck drivers.
"China's reopening is expected to improve demand for petrochemical products," an LG Chem official said at Tuesday's conference call on its fourth-quarter earnings. "Once China comes up with measures to stimulate the economy on the occasion of its annual parliamentary meetings in March, there could be a faster-than-expected improvement in market conditions."
The LG Group affiliate said that the expansion of its battery materials business enabled it to overcome the harsh economic environment here and overseas.
The company noted that it does not have any plan to downsize its investments in the production of cathode materials in North America, although a white paper on the U.S. Inflation Reduction Act showed recently that companies will be able to enjoy tax incentives, even if they source key minerals from countries that did not sign a free trade agreement with the U.S.
LG Chem also said its earnings before interest, tax, depreciation and amortization (EBITDA) reached 6.4 trillion won last year.
With the aim of showing a 4 percent year-on-year growth in sales (except the revenue from LGES) for 2023, LG Chem emphasized that it plans to continue its efforts to brace for the future.
Although higher interest rates and an economic slowdown stoked by global inflation are expected to continue weighing on the business environment this year, the chemical firm seeks to foster sustainable new businesses in the petrochemical sector by reducing carbon emissions and strengthening highly value-added businesses.
It also expects its advanced materials business to grow further this year, showing at least a 50 percent increase in the supply of cathode materials.
At its life science business, LG Chem aims to generate 1.2 trillion won in annual revenue this year by maximizing the synergy effect of its global business through AVEO, a U.S. oncology therapies company that the Korean firm decided to acquire last year.