Good afternoon. We will now start LG Chem's 2022 Q4 earnings conference call. I am Hyun-Seok Yoon, head of IR at LG Chem. Thank you for taking the time to join this call and for your interest in our company. We will begin with a brief introduction of 2022 Q4 earnings performance, followed by the CFO's presentation highlighting 2023 outlook and strategies. After which, we will delve into more details on each of the business areas and their strategies and outlook, and then end with a Q&A session. The presentation will be interpreted simultaneously, while consecutive interpretation will be provided for the Q&A session. The materials presented during this conference call can be viewed by those with web access, and it is also available for download from our corporate website. Let's begin today's call with the introduction of the management team.
We have with us our CFO, Dong-seok Cha, Myeong-seok Lee from Business Planning, Ki-dae Byun from Petrochemicals, Young-suk Lee from Advanced Materials, and Su-hee Yoon from Life Sciences. Let's begin with the business performance. On page three, consolidated Q4 sales and P&L. Q4 sales was up approximately 27% year-on-year, reporting KRW 13,852 billion. Operating profit was KRW 191 billion, and EBITDA was KRW 1,120 billion. Next page is full year business performance. 2022 annual sales backed by Advanced Materials and Energy Solutions growth was up approximately 22% year-on-year to KRW 51,865 billion, breaking KRW 50 trillion in sales, while operating profit came in at, on a consolidated basis, KRW 2,996 billion. Next, page five is our consolidated financial status.
Asset as of end of 2022 was around KRW 68 trillion, liabilities KRW 30.5 trillion, and capital was KRW 37.5 billion. Value per share showed a steep YoY rise to KRW 402,000. Next, earnings by business division. Page six, Petrochemical division. 2022 Q4 sales was KRW 4,279 billion, turning to operating loss of KRW 166 billion. On the back of continuing Petrochemical market deterioration and one-off factors such as scheduled turnaround at Yeosu NCC and its downstream facilities, as well as truckers union strike, culminated into a loss. However, high value add premium products such as POE and SAP on relatively solid demand continued to generate robust profitability. Next, Advanced Materials. 2022 Q4 sales was down 27% Q on Q to KRW 1,883 billion, with operating profit reporting KRW 18 billion.
For battery materials and cathodes in particular, shipment was slashed due to inventory adjustments at customers and weakening downstream IT and semiconductor market all drove a decline in profitability. Next, Life Science. Q4 sales was KRW 245 billion, and operating profit was KRW 11 billion. On growing sales from core products including vaccine and growth hormones, we achieved a record high quarterly sales, and profitability also improved. Next, Farm Hannong. Q4 sales was KRW 135 billion, and operating loss KRW 14 billion. With the seasonality in the second half of the year, the business posted negative earnings. While backed by higher domestic sales of crop protection products, there was a YoY rise in sales. Lastly, Energy Solutions. On the 27th, Energy Solutions presented their earnings in greater detail during its earnings call. Nevertheless, let me walk through some of the highlights.
Q4 Energy Solution sales with KRW 8 trillion 538 billion, operating profit KRW 237 billion, and OP margin was 2.8%. Driven by increases in shipments to key OEM customers and GM JV operation coming fully online, the company recorded the highest quarterly sales, sustaining the impact of economies of scale, while its profitability dipped on one-off expenses. On this note, we will conclude Q4 earnings update. I will now invite our CFO, Dong-seok Cha, to walk through 2022 corporate-wide results and to share our 2023 outlook and business strategies.
Good afternoon. I'm Dong-seok Cha, CFO of LG Chem. I would like to thank all of you for joining us today and for taking a great interest in LG Chem's earnings release despite your busy schedules. A quite tumultuous year of 2022 is now behind us as we welcome the start of a new year. In looking back, year 2022, despite challenging internal and external circumstances. Driven by growth of advanced materials and LG Energy Solution, we achieved growth breaking KRW 50 trillion in sales.
Despite year-over-year decline in profitability on the back of sluggish petrochemical business, deteriorating market conditions, we were able to build a steady business portfolio driven by expanding battery materials business, underpinned by speedy expansion from new growth engine businesses, generating KRW 6.4 trillion of solid consolidated EBITDA. In projecting what's to come in 2023, we expect inflation-led economic slowdown and prolonged high interest rate cycle will persist, making operational backdrop yet again quite challenging following last year's trends. Even under such a headwind, we will continue to drive growth and strengthen the very foundation for future growth.
In so doing, we will focus on three major action items. First, even in the midst of challenges for three major new growth engine businesses, namely the sustainability business, battery materials business, and new drug development business, we will be steadfast and channel our resources, such as investments and personnel, to continue to foster and grow these businesses. Second, on top of efficient use of resources for new growth drivers, we will maintain financial soundness. To that end, we will endeavor to improve internal efficiencies and rigorously manage working capital and be more prudent in CapEx decisions. Third, to achieve net zero target by 2050, we will actively explore and implement ideas for carbon reduction to preemptively equip ourselves with low carbon competitiveness.
We therefore plan to complete carbon footprint measurement through LCA for all our products, domestic and global, before the end of this year, and find ways to expand to Scope three emissions. Dear investors, we've presented today a bit of a slowdown in Q4 earnings under a difficult and challenging operational backdrop. As previously mentioned, we will faithfully implement strategies we've outlined today to power up LG Chem to generate greater value going forward. We ask for your generous support. Next, I will invite heads of strategy from each of the business divisions, and they will present on the details of their respective businesses. Thank you.
Now, we will take the time to delve into the details of each of the business division. First, Ki-dae Byun, in charge of business strategy from Petrochem business.
If you look at year 2022 for Petrochem business, mainly around China, we have experienced triple challenges, including rise in supply, increase in crude oil price, and sluggish demand. Especially because of the slow demand in China, we've experienced a decline in profitability for major products, including ABS and PVC. However, thanks to our strong marketing in terms of the high value add premium products, including POEC and TNAP, we were able to bring growth and hence limit the decline. In 2023, we expect oversupply will continue. However, we are looking forward to gradual improvement on the back of rebound in demand following China's reopening. As we believe that sometime around the Two Sessions scheduled in March, and once the stimulus packages are communicated, we expect domestic demand in China will start to recover.
Our company's major strategic direction is to migrate to low carbon structure for our existing products and also strengthen our capabilities in high value add products and grow sustainability new businesses. We are focusing on gaining low carbon technology as well as energy transition, and we've set up and appropriately set out on organizational changes gearing towards high value add and sustainability businesses. We invite Mr. Young-suk Lee from Advanced Materials.
Hello. I will first review 2022 business performance and then look at 2023 business outlook and strategies. If you look at year 2022, battery materials business was up 2.8x year-on-year. All of the IT materials businesses showed growth, going up 67% year-on-year. Rise in metal prices and FX rates were some of the external factors, but thanks to a beefed up product portfolio that had a strong margin focus for the NCMA cathodes, semiconductors, and OLED materials, profitability was up by seven percentage points year-over-year. We expect business backdrop to be a drag in 2023 on the back of overall slowdown in the downstream markets, namely auto, semiconductor, and display markets.
However, we believe volume growth for battery materials to continue, led by North America, and through customer diversification and build out the business space for North America, we will continue to strengthen growth potential and stability of our businesses. Around the growth businesses, including material businesses for batteries, semicon, and e-mobility, we will not only expand and strengthen our R&D investment, add new global capacity for volume growth, but also continue to invest to bolster the value chain, including for metals.
Last but not least, we would like to invite Soo-hee Yoon from Life Sciences.
Good afternoon. I would like to present on the 2022 performance and 2023 outlook for Life Sciences. If you look at the 2020 annual sales, it was up 20% year-on-year, reporting KRW 909 billion, and operating profit was KRW 73.5 billion, while OP margin reported 8.1%. From the current portfolio, core product, Zemiglo, antidiabetic drug, and Eutropin growth hormones saw sustained growth by solidifying their market position, while autoimmune med, Eucept and Zelenka, quickly expanded market share in Japan, and polio vaccine, Eupolio, launched in 2021, posted a steep growth, reporting a growth of 20% year-on-year.
In terms of new drug R&D, Tigulixostat, our in-house developed treatment for gout, started phase III clinical trials in its main markets in the U.S. and in China by entering into a licensing agreement last December. With Innovent Biologics of China, we further upped the likelihood of commercialization in the Chinese market. Following the October announcement of acquisition of AVEO, a U.S.-based new anti-cancer drug developers, we closed the deal on January 20th, securing a foothold for global expansion. AVEO is based in Boston, U.S., and as a specialized oncology pharma company, have been growing fast since it gained 2021 U.S. FDA authorization for Fotivda, which is a medication for treating kidney cancer. Through this acquisition, we have been able to gain core capabilities and specialties for the U.S. oncology market.
In short, in 2022, we brought solid growth from the current business portfolio to global new drug R&D a step ahead, also acquired AVEO, all in an effort to power up momentum to rise as a global leading pharma company. Through product portfolio diversification and higher global sales, we expect 2023 to see sustained growth from existing businesses, while with AVEO consolidation, Life Sciences division, divisional annual sales will expand to the tune of KRW 1.2 trillion. Competition may deepen for some products, including diabetic meds, but with last year's launch of autoimmune medication, Zelenka, and stronger lineup of products including Eutropin and Espen, we project steady growth on the back of rising global sales from key products such as for aesthetics and fertility and vaccine.
Under the new drug R&D timeline for 2023, gout medication, Tigulixostat, will go through phase III global clinical trial. We're planning on phase II trials for an orphan drug for obesity. One of the key things we must do in 2023 is successful post-merger integration with AVEO to lay the foundation for global business so as to lead in the U.S. oncology market. To that end, we plan to work towards early stabilization of AVEO to internalize commercialization capabilities and devise ways to maximize synergies between the two entities. Through speedy product introduction and development, we will enhance our competitiveness for the oncology pipeline and be fully prepared to take the leap as a global leading pharma company with a strong underpinning of anti-cancer drugs.
This ends the presentation by the company on the earnings performance. We will begin the Q&A session. To give as much opportunity to as many people, we ask that you ask no more than two questions per person. If you have a question, press star and one, and to cancel your questions, press star and two.
The first question is from the line of Jae-Sung Yoon from Hana Financial Investment. Please go ahead.
Thank you for this opportunity. I have two questions. My first question is related to your comment related to the sales guidance for the advanced materials, which you shared as KRW 10.5 trillion. I would appreciate if you could actually share the breakdown of this number. My second question is related to the Q4 performance of the advanced materials. In your performance, I just want to better understand the effect of the reverse lagging. How much impact this actually had in your overall earnings performance?
You asked two questions, but I will just answer the two questions with this just one answer. Please, I would like to share, mention that it's going to be very difficult for me to share the details of our P&L performance. But in terms of what we actually experience for the sales of cathodes in the Q4, as we have previously mentioned, there has been on the customer side, they made adjustments to their inventory level at the year-end and also affected from the previous quarter, the overall declining sales. It also affected our ASP. As a result, we actually experienced a more than 30% reduction in the overall sales of the cathodes.
In terms of the adjustments that were made to the volume and the changes that had happened in the metal prices, and also there were some one-off expenses related to the compensation pay that we had to make. We actually saw a significant decline in our operating profit. Going forward, as we look at 2023, of course, we will not be able to have the same experience as we did in, back in, 2022, as we saw a steep rise in metal prices, and we were able to actually generate some profit margin as a result of the inventory or stock level that we were holding. We will continue to make sure that our profitability is within 10% range as we actually continue to ensure that they're secure new demand and continue to improve our price competitiveness.
The next question is from the line of Dong- Jin Kang from Hyundai Motor Securities. Please go ahead.
Hi. Thank you. I also have a follow-up question to what was asked earlier related to advanced materials. Recently, as we see what's happening in the market, we know that OEMs are actually pricing down their EVs, and at the same time, there is growing concern about the overall demand for the EVs in the market. As we look at what happened at the end of 2022, there have been talks about OEMs cutting their orders, also lowering the sales prices. This has actually had created some concerns in the market. My question to you is, I want to better understand how you see the current situation and what is your outlook for the demand and shipment volume for 2023. Can you actually talk about this comparing to YoY?
Compared to 2022, how do you forecast the demand and the shipment for this year? You have previously mentioned that you want to maintain your profitability to be within or around 10% level. I want to better understand when you believe that this will actually be realized. Would it be something as early as the earnings performance results that we will see in the Q1 of this year? Would it take place in the first half or may possibly second half of this year? In terms of what you have mentioned related to your overall profitability guideline, when do you believe that your expectations will be realized?
My additional question is, visiting CES, I could hear from the downstream industry, specifically electronic companies as well, home electronics companies as well as automotive, automobile players, that their common message is that they're going to use less plastic products going in the future. Under this backdrop, how is the company going to respond to this? What is your strategy for this? What is your strategy to continue to secure profitability in this business?
Yeah. This is Advanced Materials, and let me address your first question. I also am very aware of the market concern related to the overall slowdown that they believe is happening on the EV side. However, if we actually look at what's happening in 2023, we see that we have forecasts where we see EV market to grow at least by 20% to even 40%. Our business division is also sharing this view as well. So in respect to your comment about OEMs cutting their orders, this is not true because if we actually look at what's happening in the Q1 of this year, we're seeing a YoY growth of 70%. For the 2023 full year, our expected growth rate YoY is actually 60%.
In terms of how we'll be performing on a quarterly basis or on a half yearly basis, I don't think there will be a very high variance in terms of what we will be generating in our earnings. We believe that, and that's why we maintain the position that we will be able to perform with a profitability of within 10%. To address your second question, this is from the Petrochem business. As you have mentioned, it's very important and it's very clear that in order to continue to deliver value to our customers on the plastics side, we have to make sure that we move away from the high carbon generating business as well as to also address the concerns people have related to the plastic waste as well.
For the company, our strategy has been set, and we want to be a market leader on the sustainability side. We want to make sure that our business is actually transformed so that we are actually creating a low carbon and an eco-friendly business structure going forward. In order to do this, we are focused, and we have already put in a lot of resources to develop key materials and solutions for this end. Of course, in order for this to be made more visible, it will take some more time. In terms of the need to actually grow the recycle area and to further build our sustainability initiative, it's very important that we cooperate with external parties and we continue to identify good opportunities to further this business initiative.
While we are doing this, at the same time, we want to make sure that we are generating a very strong cash flow through our stable business. Specifically, I'm talking about the high value-added business that we have already put in place.
The next question is from the line of Wuyong Cho from HSBC. Please go ahead.
Uh. Thank you for the opportunity. I will ask two questions. One question is on the investment side, and the other question is on your life science business. The first question related to the investment is specifically for the investment the company will be making for the battery materials. The company has plans to make significant investment in this area. I'm actually very interested in the funding plan for the company. I'm just wondering, in the short term, is it possible that one funding source for the company is a divestiture of your shares in LGES?
Moving to the life sciences business, I have already heard that you have completed the acquisition process for AVEO. I would just like to get a little bit more progress update on what has happened and if you can specifically talk about the PMI plan and also strategy going forward as you operate the AVEO business.
CFO. 먼저 내년도 CapEx 투자를 위해서 차입이나 자금 조달 방안을 물어주셨는데요. 전반적으로 내년도에는 올해 한 KRW 3.5 trillion CapEx 투자가 있었는데 작년에, 올해에는 한 KRW 4 trillion 정도 규모로 지금 예상을 하고 있습니다. 물론 대부분 매크로 불확실성이 좀 지속되고 있기 때문에 신중하게 집행할 예정이지만, 저희들이 추진하고 있는 3대 신성장 동력 사업 강화를 위한 그런 투자는 반드시 집행할 걸로 그렇게 계획하고 있습니다. 이러한 한 KRW 4 trillion-level CapEx 투자를 위해서 자금 조달은 저희들은 영업에서 창출되는 현금 외에 필요한 부분은 지금 현재로서는 대부분 차입을 통해서 조달할 예정입니다. 이미 January 중에 그중에 한 KRW 1.4 trillion 규모를 회사채 및 외화 자금을 통해서 이미 조달한 바가 있고요. 나머지 일부 조금 더 차입이 필요할 걸로 예상이 되는데, 그 부분은 또 특별한 변동 사항이 없으면은 조달 자금 차입으로 그렇게 조달할 예정입니다.
다만, 전체적으로 LG에서 보유하고 있는 우리 LG Energy Solution 주식보다는 저희들이 가지고 있는 비핵심 자산에 대해서는 사업이나 그런 자산에 대해서는 우선적으로 몸을 좀 가볍게 할 수 있는 자산 효율화를 먼저 추진하고, 그런 것들도 다 추진한 후에 모자라는 자금은 시장에서 조달할 예정인 것을 밝힙니다.
Regarding your first question, this is the CFO. You asked about our overall funding plan for us to fund the 2023 CapEx needs. In 2022, our CapEx expenditure was KRW 3.5 trillion. We increased that to KRW 4 trillion for 2023. We are actually facing many uncertainties in the macro environment, so it's very important for the company to exercise prudence. That's why when we execute our investment, we'll make sure that we'll do it in a prudent manner. Nonetheless, of the three main growth engines that we have already announced, we will continue to make investments in these areas to further reinforce the new growth engines for the company.
In terms of how we will be funding the KRW 4 trillion that's required for our CapEx, well, one main funding sources is really the cash flow from our operations. At present, we have already secured funding of KRW 1.4 trillion. This was actually done in January as we issued our corporate bonds onshore, and also there were some offshore funding that we actually successfully secured. Of course, going forward, there will be some additional funding requirement that we will be facing, but unless there is any specific special circumstances, we'll be able to do that through some borrowings. For the possibility related to the divestiture of the LG Chem's holdings of the LGES shares, I think that rather than looking to this, we also have other options.
For example, we will be looking into non-core assets and businesses and to be more asset light and to make sure that we have a very efficient asset portfolio. We'll make sure that this actually does is another route that will be considered. If we believe that we also do need additional funding, then we will be going out to the market then.
생명과학사업본부 말씀드리겠습니다. AVEO 인수 관련해서 질문 주셨는데요. 인수 관련 최근 현황으로는 December 1 기업 결합 신고 승인 이후에 January 5 주주총회 통과를 하였고, 17 외국인 투자심의위원회 승인까지 받아서 20 인수를 최종 마무리하였습니다. 이렇게 인수한 AVEO는 LG Chem의 종속회사로 편입하여 독립적인 경영 체제로 운영할 계획입니다. AVEO와의 PMI 과정에서 특히 중점을 두고 있는 부분은 역량 측면에서 AVEO의 미국 상업화 임상 허가 역량과 LG Chem의 기존 신약 연구개발, 공정개발 역량의 시너지 극대화 방안을 단계적으로 구체화해 나갈 예정이며, 항암 파이프라인 경쟁력을 높이기 위해 항암 임상 과제들의 제품 도입과 그 과제들의 개발 가속화를 위한 부분들에 신경 쓸 주력을 할 예정입니다.
This is the life science business. You asked a question related to the acquisition of AVEO. As we have shared previously, in respect to the acquisition, we first announced the acquisition of AVEO, and we made that official notification on November 1st, and then there was the shareholders meeting on January 5th. Overall, we got approval for the foreign investor to invest in the company. As such, we were successfully able to complete the whole acquisition process as of the 1st or as of 20th of January. With this process completed, AVEO is a company, it is a subsidiary of LG Chem, but it will actually be operated in an independent fashion.
Moving to the strategic focus for the company for the PMI, we want to make sure that we are leveraging the strength of our two companies. In terms of the capability for AVEO, they have much competency and experience in terms of securing clinical trial approvals from the United States. For LG, we have also capabilities in developing new drug pipeline as well as processes to support this. We want the two companies to be able to create synergies by developing these strengths even further going forward.
We want to make sure that for AVEO, we continue to make sure that they are highly competitive in developing the new cancer drugs, and to make sure that we have a very strong pipeline, and to make sure that we're able to bring the clinical trial and accelerate this process as much as possible.
The next question is from the line of Jong Jin Park from JPMorgan. Please go ahead.
Hi, thank you for the opportunity to ask questions. I'm Jong Jin Park from JPMorgan. I have two questions on your battery materials mid to long-term strategy. The 1st question is on cathode. Could you share with us what is the impact from the December IRA guideline on your North America cathode plans? Given the high CapEx involved in U.S. versus other regions, has there been any change in plans? second question is, could you give us an update on your separator capacity build-out? What kind of margins do you expect from the base separator and coating business? What is the margin you are getting from the coating business right now? Similarly, is there any impact on your North America separator plans, post the December IRA guideline? Thank you.
I will answer your question one by one. The first question is related to the cathode investment plan. In respect to the IRA December guideline, that has been announced, but the IRA implementation plan has not been fully disclosed. As we just look at what was announced in December, it clearly shows that there is a little bit more room to maneuver for LG Chem than we had anticipated. Of course, we do have to work with our customers and the North American OEMs as well as cell makers do prefer and make requests so to have suppliers to have presence in North America. That is why we do not have any change in respect to our investment plan in North America.
Of course, for the detail planning of the investment, it will be done in phases, and we'll closely work with our counterparts as we go further, and we'll have more details to develop for our investment plan as we continue our discussions with the customers. Moving to your second question related to the separators, LG Chem currently has a production capacity for these separators, but this is only on the coating side. Our current capacity is 700 million square meters. That's why we actually are not, in terms of our profitability competitiveness, not as competitive when we compare ourselves to companies that also have the base film production. That is why the company has set up the Hungary joint venture with Toray.
Our target is to also have the base film production capacity of 900 million square meters by 2027. In terms of our overall performance for the separators going forward, we believe that by year 2026 we'll be able to record sales of KRW 1 trillion and to enjoy double-digit profit margin. Of course, in terms of whether or not we'll be actually setting up any capacity in North America, in the U.S., it's still very much early to talk about this because the IRA implementation plan has not been announced. Once the plan is announced, then we'll be able to have some additional dialogue with our customers. At this time, we are really in the early stages of just exploring, the possibility of setting up the, separator capacity in the U.S.
The next question is from the line of Jin Myung Lee from Shinhan Investment. Please go ahead.
Thank you for the opportunity. My question is actually directed to the petrochemical business as well as to the cathode business plan. I would like to hear from the company a little bit more about the opportunity costs related to the fourth quarter and the overall response plan as you actually look at the overall outlook for the downstream. Also for this year, of course, last year, we also saw how important the metal prices were for your business. What is your outlook for the metal prices for this year? What is your metal sourcing plan for this year as well?
Related to your question on the petrochem business and for Q4, if we talk about the opportunity cost, that would roughly translate into KRW 120 billion as we did the turnaround. As a result of the unionized truckers strike that amounted to about KRW 20 billion. In total, the size was around KRW 140 billion-KRW 150 billion. You also talked about the downstream utilization level for 2022. For NCC and PO, due to the concerns of the oversupply in the market, the utilization level was at around 80%. Of course, for our core business areas such as PVC and ABS, in terms of the utilization level, it was actually at a very close to the normal level.
To address your question related to the outlook for metal prices and metal sourcing, we believe that on the nickel side, we will not see a strong fluctuation in prices in 2023. In the outlook for lithium is very much dependent on the demand side in China. If we look at the overall market consensus that they do, of course, the extent of the decline may vary by source, but the overall market view is that the lithium prices will also fall. In terms of what we will be doing, we'll do actually stronger monitoring of what's happening to the lithium market. We'll make sure that we are more flexible and elastic in terms of how we manage our inventory.
We will also make sure that in terms on the sourcing side, we'll make sure that we're able to source precursors from companies that are able to actually give us very favorable prices. On the lithium sourcing side, we'll be making sure that we continue to develop strategic partnerships or cooperations with companies that are currently in countries that U.S. has FTAs with. In terms of cooperation, it could be possibly some equity investment. It could also include some equity investment in these companies as well.
네, 마지막 질문 받도록 하겠습니다. 마지막으로 질문해 주실 분은 메리츠증권의 노우호 님입니다. 질문 부탁드립니다.
The last question is from the line of Roh Woo-ho from Meritz Securities. Please go ahead.
네, 안녕하세요. 저 Meritz Securities의 Roh Woo-ho입니다. 질문 기회 감사합니다. 우선은 2023년도 그리고 이제 중장기 양극재 사업 전략 관련해서 질문을 먼저 드릴 예정인데요. 과거부터 그 저희 전지 소재 사업부에서 이제 LG Energy Solution 외 외부 이제 신규 고객사를 유치할 계획을 시장과 꾸준히 소통을 하셨던 걸로 저희는 기억을 하는데 지금 최근 들어서 이제 LG Chem의 중장기 양극재 생산 계파도 이제 증설 계획에 대해서 공유를 해 주셨고, 그리고 동시다발적으로 이제 LG Energy Solution을 비롯한 국내 셀 기업들의 공격적인 증설 계획들이 제시가 되고 있는데 혹시 지난 1, 2년 동안 우리의 신규 고객사 확보에 대한 성과물, 이런 노력들에 대해서 올해는 결과물로 혹시 기대를 해볼 수 있는지 여부에 대해서 질문을 먼저 드리고요.
두 번째로 이제 올해 2023 연간 석유화학 전망에서 이제 March에 중국 Two Sessions 이벤트를 기대를 해 보신다라고 하셨는데 관련해서 결국 저희가 직접적으로 연동돼 있는 다운스트림 제품들 그리고 이제 뭐 NCC/PO의 범위원과 관련해서 올해 수익성 전망에 대한 그 매출 그리고 혹은 이익에 대한, 수익성에 대한 그 비중을 좀 나눠서 말씀해 주시면 감사하겠습니다. 시장입니다.
This will be the last question. Thank you for this opportunity. I would like to first ask about the overall company's strategy for cathodes, specifically for 2023. Also if you can share your mid to long term business strategy for cathodes as well. For very considerable time as a battery materials business under LG Chem, and also LGES, in light of LGES, you also continue to have communicated that you are working hard to continue to secure new customers.
In light of LG Chem's sharing your plan to add capacity on cathode side, at the same time, as we look at what's happening and there have been many announcements not only by LGES but other cell makers, they've also come out to the market announcing many capacity expansion plans as well. If the company can share your progress and some results that you have been able to make in the last one or two years, and how you have been able to develop and secure new customers, this will be very helpful. Is it possible that some results could be actually be realized in a very near future?
Going back to the comment on the Petrochem business, and as we look at the overall outlook for 2023 full year performance, you also mentioned that you are anticipating that overall positive developments to be happening as China actually hosts these the Two Sessions. In terms of your outlook for the downstream, what's going to be the overall profit margin outlook for your downstream products, including the commoditized NCC products as well?
예, 첫 번째 질문에 대한 답변드리도록 하겠습니다. 당사는 그 올해부터 본격적으로 NCMA, 단입자, 하이 니켈 제품 등 고부하 제품 비중을 지속적으로 확대할 예정입니다. 추가적으로 중국 양극재 생산의 안정화 등 그 원가 경쟁력 강화 노력을 지속을 하고 있고요. 추가적으로 할인 메탈 소싱 가능한 광산업체와의 협력체계 구축을 통해서 경쟁사대-대비 다소 높은 원가 경쟁력을 보유하고 있다고 생각됩니다. 추가적으로 글로벌 셀 업체 등과의 협력체계 그 공급 조건들을 논의 중에 있고, 올해부터 고객 다변화에 대한 가시적인 성과가 나타날 것으로 예상을 하고 있습니다.
To answer your question, the company will continue to expand high value added product lines, including the NCMA single particle as well as high nickel products. We will continue to make sure that we are stabilizing production of cathodes in China, which will also further strengthen the company's cost competitiveness as well. We'll continue to build relationships with the mining companies so that we'll be able to secure metal, secure metal products in very favorable prices as well, which will once again help the company to be even more cost competitive as well. We have been talking with global cell makers over time, and we want to, we are able to, and this is in line with our efforts to diversify our overall customer base. We believe that from this year we'll be able to show some visible results.
예, 석유화학 부분 말씀드리겠습니다. 그 올해 실적 전망, 그 또한 유가나 환율 등 이제 사업 환경의 변동성이 커서 현 시점에서 구체적으로 좀 언급하기는 어려운 부분이 있습니다. 다만 중국의 시황 회복에 따라 그 중국을 중심으로 한 PVC와 ABS 사업의 개선 여지가 다소 있고, 반면 NCCPO는 중국의 공급 과잉으로 인해서 여전히 어려운 시황이 예상되고 있습니다. 어, 좀 자세한 내용은 중국에서의 어떤 실질적인 변화를 본 일분기 이후에 구체적으로 말씀드릴 수 있을 것 같습니다.
This is the Petrochem business. In terms of giving you more color in terms of how we see Petrochem business performing this year, it's not so easy as we believe that there is still very high uncertainties and fluctuations that could happen in the market in terms of the oil prices as well as the exchange rate. In terms of what's going to happen, we believe that in terms of PBS and ABS, the market situation will improve in China. There's room for improvement for PVC and ABS. However, on the NCC/PO side, it's still going to be a oversupply situation, so we will be facing challenges there.
In terms of giving you more additional information, I think we do have to go beyond Q1 as we see some more tangible changes happening in China, and then we'll be able to share with you, more meaningful, communication.
네, 이것으로 LG화학 2022년 4분기 실적발표 컨퍼런스 콜을 모두 마치겠습니다. 추가적인 문의사항이 있으신 분은 언제든지 IR팀으로 연락해 주시기 바랍니다. 바쁘신 가운데에서도 참석해 주신 투자자 여러분들께 감사의 말씀을 드립니다. 감사합니다.
On this note, we will be concluding LG Chem's Q4 earnings performance call. Thank you very much for your participation. If you have any questions, please feel free to contact the IR team. Thank you.