Competition in Petrochemical Sector
LG Chem and Lotte Chemical will compete for the first place in the petrochemical industry once again. LG Chem, which has reclaimed the number one spot in the second quarter on the sixth quarters, is trying to maintain its crown, while Lotte Chemical, which is considered an emerging dark horse, is seeking to turn the tide in the drama.
According to financial information provider WISEfn on August 2, LG Chem is expected to post 711.8 billion won (US$632.99 million) in operating profit in the third quarter, up as much as 154.7 percent from 460 billion won (US$409.07 million) at the same period a year ago. Lotte Chemical is likely to see its operating profit increase 10.7 percent on-year from 643.2 billion won (US$571.99 million) to 685.8 billion won (US$609.87 million). When the two companies bring the results as expected, LG Chem will hold a dominant position for two quarters in a row. LG Chem is also expected to have sales of 6.32 trillion won (US$5.62 billion), surpassing Lotte Chemical with sales of 3.71 trillion won (US$3.3 billion).
However, the nation’s major 13 securities firms have recently produced a different operating profit consensus for the two companies after announcing the second-quarter performance. They think Lotte Chemical and LG Chem will post an operating profit of 753 billion won (US$669.63 million) and 727.9 billion won (US$647.31 million), respectively, in the third quarter. Considering the latest survey alone, Lotte Chemical will win a decision.
LG Chem is believed to post 694 billion won (US$617.16 million) in operating profit in the basic material (petrochemical) sector. The company has various business divisions other than basic material such as battery, electronic information material, life science and Farm Hannong, while Lotte Chemical only focuses on the petrochemical business sector.