Tesla Battery Supplier LG Chem Posts Record Q4 Revenues Amid Surging EV Demand

Tesla Inc's TSLA battery supplier LG Chem reported Wednesday a record quarterly profit and also swung to a profit on an operating basis.

What Happened: South Korea's LG Chem said its fourth-quarter revenues rose 19.9% to 8.8858 trillion won ($803.356 million), representing a quarterly record.

LG Solutions, the company's electric vehicle battery manufacturing subsidiary, contributed 4.128 trillion won, or roughly 50% of the revenues. The segment's revenues increased 66%. Notable contribution also came in from the petrochemicals segment, which ringed in revenues of 3.674 trillion won.

On an operating basis, the company reversed from a loss of 33 billion won to a profit of 674 billion won.

Related Link: Tesla Supplier LG Chem Recalls Home Battery Systems In US Due To Fire Hazard

For the full-year 2020, LG Chem's revenues increased 9.9% to 30.0575 trillion won and operating profit climbed 185.1% to 2.3532 trillion won.

The company guided to 2021 revenues of 37.3 trillion won, representing a 24.1% increase from 2020, as it shifts focus to major business areas, namely battery materials, sustainable solutions, e-Mobility materials and global new drug development.

Why It's Important: LG Chem is in the sweet spot of surging electric vehicle demand, which is expected to increase demand for batteries. Battery accounts for a lion's share of the cost of green energy vehicles. Results from the battery subsidiary is expected to boost LG Chem's topline in the coming years.

The petrochemical business is seen to experience accelerating growth, as the world emerges from the COVID-19-induced lockdowns.

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