LG Chem Ltd. reported a return to net profit in the second quarter, reversing a loss from the same period last year.
The South Korean chemical giant attributed the turnaround primarily to a positive inventory lag effect, which boosted margins as raw material costs stabilized while product prices remained firm.
The result marks a significant operational shift for the company, which has faced margin pressure in recent quarters due to volatile input costs and softening demand in certain chemical segments.
The inventory lag effect—a common accounting phenomenon where companies sell goods produced during periods of lower input costs at current higher prices—provided a temporary but meaningful boost to profitability.
LG Chem's recovery comes as its sibling company, LG Electronics, posted record second-quarter operating profits earlier this week, driven by strong global demand for home appliances.
The contrasting performance highlights the different cyclical positions of the two LG Group units, with the electronics division benefiting from consumer demand while the chemical business navigates a more complex cost environment.