Seoul: LG Chem Ltd., South Korea's leading chemical company, announced a significant financial setback as it reported a net loss for the first quarter, a reversal from its performance a year earlier. The downturn was primarily attributed to diminished equity gains from its affiliates.

According to Yonhap News Agency, LG Chem revealed a net loss of 781.9 billion won (US$526.2 million) in the first quarter. This marked a stark contrast to the net profit of 260.4 billion won recorded during the same period last year. The decreased contributions from equity stakes in affiliates, notably LG Energy Solution Ltd., were significant factors impacting the company's quarterly results.

LG Energy Solution, recognized as the nation's largest battery manufacturer, reported an operating loss of 207.8 billion won for the first quarter. Additionally, LG Chem itself faced an operating loss of 49.7 billion won, a downturn from the operating profit of 437.7 billion won a year ago. The company's sales also saw a decline of 2.6 percent, dropping to 12.24 trillion won from the previous 12.58 trillion won.

The company's Chief Financial Officer, Cha Dong-seok, highlighted the challenges posed by increased raw material costs in the petrochemical sector. These costs were exacerbated by geopolitical tensions in the Middle East, which partly offset the operational losses. "With geopolitical risks in the Middle East and weak demand for electric vehicles (EVs) in the United States expected to persist for the time being, the company will restructure its portfolio toward higher value-added and higher-margin businesses," Cha stated.