UpdateSouth Korea's LG Chem Q4 net profit down 30.9% on poor demand

27 January 2014 08:43  [Source: ICIS news]

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SINGAPORE (ICIS)--South Korea’s LG Chem reported on Monday a 39.0% year-on-year drop in its fourth-quarter net profit to Korean won (W) 176.7bn ($164m), partly on the back of poor seasonal demand.

The company’s earnings in the fourth quarter of 2013 were also weighed by rising feedstock costs and the strengthening won, the company said in a document on its website.

LG Chem’s overall sales slipped by 0.7% year on year to W5,641bn in October-December 2013, while its operating income was down by 13.1% at W316.4bn, the company said.

Margins at the company’s polyvinyl chloride (PVC) segment were squeezed by the influx of offshore supplies and slow demand from emerging markets such as India, the company said without elaborating further.

Its rubber and specialty polymers business, meanwhile, saw its margins decline in the fourth quarter on the back of a slowdown in the bisphenol A (BPA) and rubber markets, it added.

The company is planning to invest W480bn in its petrochemicals business this year, out of a total of W960bn for new and expansion projects.

This includes projects at its naphtha cracking centre in Yeosu, its super absorbent polymer (SAP) business as well as its acrylic acid (AA) unit.

LG Chem earlier this year said that it will invest W320bn to boost its production capacity for AA at the Yeosu site from 350,000 tonnes/year to 510,000 tonnes/year.

This expansion project is expected to be completed in 2015, the company added.

Part of the W480bn capital expenditure budget set for 2014 will go towards the company’s planned polyethylene (PE) plant at Atyrau in Kazakhstan, it said.

($1 = W1,080.40)

By: Nurluqman Suratman

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