LG Chem maintained positive cash flow through an upgraded business portfolio and asset monetisation despite weak performance in key businesses such as petrochemicals and battery materials. The company sees this year as an important opportunity to shift to a high value-added industrial structure. It is also moving to enhance shareholder value, including using 10 percent of proceeds from any sale of its stake in LG Energy Solution for shareholder returns.

LG Chem said on Jan. 29 it posted consolidated revenue of 45.9 trillion won and operating profit of 1.18 trillion won last year. Revenue fell 5.7 percent from a year earlier, while operating profit rose 35.0 percent.

In the fourth quarter, it recorded revenue of 11.2 trillion won and an operating loss of 413.3 billion won. Annual results improved, but it still posted a loss in the fourth quarter.

CFO Cha Dong-seok (차동석) said, "Amid rapidly changing external uncertainties, key businesses such as petrochemicals and battery materials posted weak results." He added, "We maintained cash flow in positive territory by pursuing an upgraded business portfolio to strengthen future competitiveness, enforcing disciplined capital spending and monetising assets."

LG Chem's revenue last year excluding LG Energy Solution was about 23.8 trillion won. Considering the external business environment, the company set this year's revenue target at 23.0 trillion won, roughly in line with last year.

It will strengthen its shareholder return policy. Cha said, "The business environment is difficult, but we will do our best to enhance shareholder value by increasing the dividend payout ratio as performance improves and returning about 10 percent of funds secured when selling the stake in LG Energy Solution to shareholders." If the sale of the LG Energy Solution stake takes place, some of the proceeds will go to shareholders. The dividend payout ratio is also expected to rise as performance improves.

LG Chem will accelerate the pace of cash flow improvement through a business portfolio reshuffle and asset monetisation. Cha said, "We will focus on securing future growth engines for each business segment such as petrochemicals, advanced materials and life sciences, and make this year an important turning point that firmly establishes the foundation for a shift to a high value-added industrial structure."