LG Chem Ltd., South Korea’s top chemicals company, said Thursday that its operating profit climbed 9.2 percent on year to 1.99 trillion won ($1.72 billion) last year, the highest level in five years since 2011. To keep up the upward momentum, the company pledged 2.76 trillion this year to expand facility.

Full-year sales rose 2.2 percent to 20.66 trillion won amid increasing battery sales.

The strong business performance was driven by tangible sales in battery business and a robust cost-price spread, the company said. In particular, basic materials business for petrochemical products made large profits, more than offsetting losses in non-petrochemical units.

Fourth-quarter sales grew 9.3 percent to 5.51 trillion won and operating profit jumped 31.2 percent to 461.7 billion won. Net profit soared 30.4 percent to 270 billion won.

The company said its fourth-quarter operating profit sharply increased thanks to business improvement in basic materials despite seasonal weakness and increased orders in battery and IT materials.

LG Chem said it expects to maintain strong earnings pace this year thanks to a robust market demand for basic materials, growing sales in high value products, EV battery and energy storage products, and increased competitiveness in IT materials. In addition, sales in life science will be increasingly visible, and key subsidiary Farm Hannong will see a modest operating margin, the company said.

LG Chem said it will spend 2.76 trillion won on facility investment this year, up nearly 40 percent from a year ago.

“We set aside about 900 billion won for capex investment in battery business, which includes more than 700 billion won to increase production capacity in overseas sites in China, Europe and the U.S. and the remaining will be spent on new model development and IT process improvement,” LG Chem president and chief financial officer Chung Ho-young said in a conference call.

“We will also inject some 800 billion won to strengthen basic materials business, and most of this money will go to projects to expand NCC, POE, ABS and other high-value product lineups.”

Shares of LG Chem finished Thursday at 270,000 won, up 2.47 percent from the previous session in Seoul trading.

By Jung Wook

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