Seoul: LG Chem Ltd., South Korea's leading chemical company, announced on Friday that it swung to a net profit in the second quarter, attributed primarily to a positive inventory lag effect.

According to Yonhap News Agency, LG Chem posted a net profit of 66.8 billion won (US$46.5 million) for the three months ending in June, reversing a net loss of 111.9 billion won from the same period last year. The improved financial performance was largely driven by favorable spreads for key petrochemical products resulting from the inventory lag effect associated with the U.S.-Iran conflict in the Middle East, as well as robust sales in its advanced materials and life sciences sectors, as stated by Chief Financial Officer Cha Dong-seok.

Looking ahead, LG Chem plans to transition its business focus to higher-value-added products and foster growth in future-oriented sectors like semiconductor and mobility materials to establish a sustainable earnings foundation. The company's operating profit showed a significant increase of 25.8 percent, reaching 599.6 billion won, compared to 476.8 billion won in the previous year. Additionally, sales rose by 19 percent to 14.17 trillion won from 11.9 trillion won.

The operating profit exceeded average estimates by 46.2 percent, based on a survey conducted by Yonhap Infomax, the financial data firm of Yonhap News Agency. However, for the first half of 2026, LG Chem recorded a net loss of 715.1 billion won, contrasting with a net profit of 148.5 billion won in the same period the previous year. During this time, operating profit declined by 39.9 percent to 549.9 billion won from 914.5 billion won, while sales increased by 7.9 percent to 26.42 trillion won from 24.48 trillion won.