LG Reports Q2 Consolidated Operating Profit of 500.4 Billion KRW, Down 14% YoY... "Decrease in Equity Method Income from Petrochemicals"

Subsidiary Losses Lead to Holding Company Performance Decline

[Asia Economy Reporter Moon Chaeseok] LG announced on the 11th that its consolidated preliminary operating profit for the second quarter recorded 500.489 billion KRW, a 14% decrease compared to the same period last year.

During the same period, sales amounted to 1.738145 trillion KRW, showing a 14% increase.

Net profit was recorded at 477.966 billion KRW, a 52% decrease.

The performance of a holding company depends on the performance of its affiliates. Since the holding company does not directly engage in sales or production activities, its earnings come from dividend income and equity method valuation gains received from subsidiaries according to its shareholding ratio.

Here, equity method valuation gains refer to the method of evaluating the profits and losses of companies in which shares are held, proportional to the shareholding amount.

An LG official stated, "The main reason for the decrease in (second quarter consolidated operating profit) is the decline in profitability of the petrochemical business, which was highly profitable last year, and the weakening of living health and duty-free businesses, resulting in a decrease in equity method gains from chemical affiliates."