LG Chem Reports Doubling of Net Profit in Fourth Quarter Amid Strong Exports to China

Strategic Insights -

South Korea's largest chemicals company, LG Chem, saw its net profit more than double in the fourth quarter due to brisk sales of its mainstay PVC products to China. The company's strong performance followed a difficult year in 2003, marked by the war in Iraq, SARS, and a sluggish global economy. LG Chem's president, No Ki-ho, attributed the improved sales to an increase in exports of petrochemical and industrial materials, as well as the enhanced capacity of its main information and electronic materials products.

Key Takeaways:

  • LG Chem's net profit for the fourth quarter of 2003 rose to Won88.7bn (Dollars 75.8m), a doubling from Won40.4bn in the same period last year.
  • The company's sales increased about 7 per cent to Won1,517bn in the fourth quarter.
  • LG Chem's net profit for the full year 2003 rose almost 5 per cent to Won362bn, while sales increased more than 10 per cent to Won5,673bn.
  • The company is targeting a net profit of Won485bn on sales of Won6,268bn in 2004.
  • LG Chem plans to boost its investment in the petrochemical sector by 14.7 per cent to Won621bn in 2004.
  • The company has aggressively invested in China over the past few years, with a plan to buy up to Won100bn in commercial paper from LG Card, a former credit card affiliate.

Statistics:

  • Won88.7bn (Dollars 75.8m) - LG Chem's net profit for the fourth quarter of 2003.
  • 7% - Increase in sales for the fourth quarter of 2003 compared to the same period last year.
  • Won1,517bn - LG Chem's sales for the fourth quarter of 2003.
  • Won362bn - LG Chem's net profit for the full year 2003.
  • 10% - Increase in sales for the full year 2003 compared to the previous year.
  • Won5,673bn - LG Chem's sales for the full year 2003.
  • Won485bn - LG Chem's target net profit for 2004.
  • Won6,268bn - LG Chem's sales target for 2004.
  • Won621bn - LG Chem's investment target for the petrochemical sector in 2004.
  • 14.7% - Increase in LG Chem's investment in the petrochemical sector in 2004.

Sources:

  • "LG Chem, South Korea's biggest chemicals company, yesterday reported a doubling in fourth-quarter net profit, propelled by strong exports to China." (The Straits Times, date not specified)
  • "For most companies, 2003 was a difficult year with the war in Iraq, Sars and the sluggish global and domestic economy," said No Ki-ho, the company's president. (The Straits Times, date not specified)
  • "However, an increase in exports of our petrochemical and industrial material products as well as the enhanced capacity of our main information and electronic materials products improved our overall sales." (The Straits Times, date not specified)
  • LG Chem, the world's sixth-largest PVC maker, plans to boost its investment in the sector by 14.7 per cent to Won621bn this year. (The Straits Times, date not specified)
  • LG Chem yesterday announced a plan to buy up to Won100bn in commercial paper from LG Card, its former credit card affiliate. (The Straits Times, date not specified)