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UPDATE 2-LG Chem posts record Q1 profit on strong chemical material demand

(Adds LG Chem’s comment and background)

SEOUL, April 28 (Reuters) - LG Chem Ltd reported a more than six-fold jump in quarterly operating profit on Wednesday as demand for surgical gloves and consumer electronics driven by the COVID-19 pandemic boosted sales of raw materials such as chemicals.

The South Korean chemical and battery maker, whose wholly-owned battery subsidiary LG Energy Solution supplies Tesla Inc and General Motors Co, posted operating profit of 1.4 trillion won ($1.26 billion) for the January-March period, versus 206 billion won in the same period a year earlier.

That compared with the 1 trillion won forecast of analysts in the Refinitiv SmartEstimate.

Revenue rose 43% on year to 9.7 trillion won, LG Chem said in a regulatory filing.

Analysts said a continued rise in demand for materials stemming from the prolonged coronavirus pandemic contributed to LG’s record quarterly operating profit, as chemical materials used for home appliances and medical gear such as surgical gloves were in high demand.

The company also saw solid demand for its electric car batteries in the first quarter, backed by increased supplies of its cylindrical batteries for Tesla.

Earlier this month, the U.S. electric carmaker posted record deliveries for the first quarter even as a global chip shortage hurt its auto sector rivals.

“Besides the United States, we plan to secure a new worksite in other places including Europe,” LG said during its earnings conference call.

Earlier this month, LG Energy Solution and General Motor said they will build a second U.S. battery cell manufacturing plant, revealing plans for a $2.3 billion factory in the U.S. state of Tennessee.

In March, LG Energy Solution said it plans to invest more than $4.5 billion in its U.S. battery production over the next four years.

$1 = 1,112.7100 won Reporting by Heekyong Yang and Joyce Lee; Editing by Jacqueline Wong and Kim Coghill

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