LG Chem (051910) Q2 2026 earnings summary

Executive summary

• Q2 2026 consolidated sales reached KRW 14.176 trillion, with operating profit at KRW 600 billion and net profit at KRW 67 billion, achieving an operating margin of 4.2%.

• Net income turned positive in Q2 after two consecutive quarters of losses, driven by Energy Solution and Advanced Materials, while profitability improved across most segments.

• H1 2026 consolidated revenue was KRW 26,422,690 million, with main contributions from energy solutions (53.4%), petrochemicals (36.5%), advanced materials (5.6%), life sciences (2.6%), and others (1.9%).

• Profitability improved in Petrochemicals and LG Energy Solution, while Advanced Materials and Life Sciences divisions also returned to profitability.

• 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 billion in Q2 2026, up from KRW 1,442 billion in Q1 2026.

• Cash and equivalents increased to KRW 12,696 billion at quarter-end.

• Debt ratio increased quarter-over-quarter to 129.6%.

Outlook and guidance

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

• Advanced Materials expects growth from new cathode material customers and increased ESS separator volumes.

• Life Sciences profitability projected to decline in Q3 due to shipment timing and increased R&D expenses.

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

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