LG Energy Solution reports 187.7 billion won third quarter net

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LG Energy Solution reports 187.7 billion won third quarter net

An employee at the LG Energy Solution's headquarters office in Yeongdeunpo District, western Seoul [NEWS1]

An employee at the LG Energy Solution's headquarters office in Yeongdeunpo District, western Seoul [NEWS1]

 
Battery makers reported mixed results in the third quarter.
 
LG Energy Solution logged a net profit of 187.7 billion won ($132.2 million) for the July-September period, compared to a net loss of 205.8 billion won in the third quarter last year. The figure fell short of the market consensus of 274.3 billion won compiled by FnGuide.
 
Sales and operating profit came in line with the preliminary announcement released on Oct. 7.
 
Sales jumped 89.9 percent on year to a record 7.65 trillion won. Operating profit was 521.9 billion won, marking a turnaround from the 372.8-billion-won loss a year earlier. Both figures beat market expectations.
 
The battery maker moved up its target sales for this year from the previous 22 trillion won to 25 trillion won. It was the second adjustment this year, following the previous modification made in July, from 19.2 trillion to 22 trillion won.
 
The demand will remain strong through the end of the year, especially in the United States, said the company.
 
“As of the end of September, the cumulative order backlog reached 370 trillion won, up from last year’s 260 trillion won,” said LG Energy Solution Chief Finance Officer Lee Chang-sil during a conference call Wednesday. “And the United States takes 70 percent of the total.”
 
The U.S. EV market is forecast to grow 33 percent every year on average by 2030, according to LG Energy Solution. As the Inflation Reduction Act is set to take effect starting next year, LG Energy Solution is focusing on diversifying sourcing away from China, signing procurement deals with non-Chinese companies such as Kansas-based Compass Minerals.
 
Samsung SDI posted an expectation-beating net profit of 638.3 billion won for the third quarter, up 52 percent on year. Sales jumped 56 percent to 5.37 trillion won, beating the average forecast of 5.33 trillion won.
 
Operating profit was 565.9 billion won, a 52 percent increase year-on-year. The figure beat the consensus of 492.7 billion won. Both sales and operating profit are record quarterly figures.  
 
Samsung SDI cited increasing demand for luxury EVs and strong sales of energy storage systems in Europe for its record performance.
 
Both LG Energy Solution and Samsung SDI report steady increases in their profit margins.
 
LG Energy Solution’s operating profit margin was 6.8 percent in the third quarter, compared to the previous quarter’s 3.9 percent.
 
Samsung SDI’s operating profit margin rate stood at 10.5 percent. The profit margin has been increasing throughout the year, from the first quarter’s 8.0 percent and the second quarter’s 9.0 percent.
 
LG Energy Solution’s share price rose 3.52 percent Wednesday, to close at 529,000 won. Samsung SDI climbed 3.36 percent to 677,000 won.  
 
SK On, a battery subsidiary of SK Innovation, will report its quarterly earnings on Nov. 3.
 

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]
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