In this file photo, an LG Energy Solution showroom is set up at the InterBattery 2021 exhibition held at COEX in southern Seoul, on June 9, 2021. (Yonhap)
SEOUL, Jan. 27 (Korea Bizwire) – LG Energy Solution Ltd. (LGES) said Friday it is aiming for a revenue target increase in the range of 25-30 percent for 2023 from last year, as it posted record earnings last year on the back of solid growth in the global electric vehicle (EV) market.
That amounts to about 33 trillion won (US$26.8 billion) in sales when reflecting the 30 percent growth target. LGES’ annual sales jumped 43 percent on-year to 25.6 trillion won for 2022, outrunning the 22 trillion-won revenue target the battery maker had set for the year.
The world’s second-largest battery maker plans to increase capital expenditures by 50 percent this year from 6.3 trillion won in 2022, the company said in a regulatory filing, signaling the aggressive push for market expansion will continue.
For 2022, LGES’ operating profit soared 58 percent to 1.2 trillion won, compared with 768.4 billion won the previous year.
“The overall shipments increased due to the recovery in demand for EV and power grid ESS (energy storage system), and the expanded pass-through pricing of raw materials helped generate the record annual sales,” LGES CFO Lee Chang-sil said.
“We anticipate such sales growth this year with sales expected to rise in North America, and the expansion and stable operations in our global manufacturing facilities,” Lee said.
Lee said the company will work to boost the global annual production capacity to 300 gigawatt hours (GWh), equivalent to powering approximately 4.3 million full electric vehicles.
LGES operates overseas factories in Poland and China, and has a joint venture with General Motors Co., which runs a plant in Ohio, and is building two other plants in Michigan and Tennessee.
As of end-2022, LGES’ order backlog had stood at 385 trillion won.
LGES said it is considering supplying its future output from the envisioned Arizona plant to Tesla Inc., implying the 1.7 trillion-won investment will proceed as originally planned.
LGES said earlier it was reconsidering the plan to build a new battery manufacturing facility in Arizona due to rising costs amid persistent global inflation.
This photo provided by LG Energy Solution Ltd. shows the battery maker’s cylindrical batteries.
LGES said it expects the global EV battery market to expand about 33 percent to 890 GWh from 670 GWh, with North America forecast to drive the market expansion with about 60 percent annual growth estimated for the region alone.
LGES counts General Motors Co. and Hyundai Motor Co. as its clients, among other automakers.
To bolster competitiveness, LGES said it will beef up efforts to develop high-nickel cathodes, silicon anodes, new cylindrical form factors and lithium iron phosphate cells so that they are tailored to the customers’ needs.
It will work to diversify the sourcing for raw materials and increase investment in the upstream, while continuing efforts to gain an edge in next-generation cell technologies, such as lithium sulfate and solid-state batteries.
In the fourth quarter of last year, LGES’ operating income more than tripled to 237.4 billion won from a year earlier. Sales nearly doubled to 8.5 trillion won from 4.4 trillion won.
Compared with the previous three months, however, the operating profit declined 54.5 percent, due largely to one-off costs, such as incentives for employees and an inventory write-down.
Shares in LGES closed down 2.13 percent to 506,000 won on the main Seoul bourse Friday, underperforming the broader KOSPI’s 0.63 percent gain. The earnings results were released after the stock market opened.
(Yonhap)
