The logo of LG Chem is seen at its office building in Seoul, South Korea, October 16, 2020. REUTERS/Kim Hong-Ji
SEOUL, July 29 (Reuters) – LG Chem Ltd (051910.KS) posted a four-fold surge in second-quarter profit that trumped market expectations, helped by settlement payments from legal disputes with its rival SK Innovation Co Ltd (096770.KS) that were resolved in April.
The South Korean chemicals and battery maker, whose wholly-owned battery subsidiary LG Energy Solution supplies electric vehicle (EV) batteries to General Motors Co (GM.N) and Tesla Inc (TSLA.O) among others, reported an operating profit of 2.2 trillion won ($1.92 billion) for the April-June period. A year earlier it reported a 572 billion won profit.
It beat an average broker forecast of 1.2 trillion won, compiled by Refinitiv SmartEstimate.
LG Chem said on Thursday sales of its cylindrical batteries rose in the second quarter, but warned that a global auto chip crunch had affected car production.
After a months-long crisis, some company executives are cautiously optimistic the chip shortage will ease in the second half of this year. Still others, such as Stellantis (STLA.MI), said they expect the crunch to continue well into next year.
In April, SK Innovation said it would pay LG Chem nearly $2 billion to drop all litigation in a bitter trade secrets dispute that had threatened a plant in the U.S. state of Georgia which SK is building to supply Ford Motor Co (F.N) and Volkswagen AG (VOWG_p.DE). read more
($1 = 1,146.7800 won)
Reporting by Heekyong Yang and Joyce Lee; Editing by Christian Schmollinger and Sonali Paul
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