This file photo, provided by LG Energy Solution Ltd. on Sept. 3, 2021, shows the showroom at its R&D center in Daejeon, 164 kilometers south of Seoul.
SEOUL, July 7 (Korea Bizwire) — South Korean battery maker LG Energy Solution Ltd. said Thursday it expects its second-quarter operating profit to shrink sharply from a year earlier due to global supply disruptions and China’s COVID-19 lockdowns.
The company estimated operating income for the April-June period at 195.6 billion won (US$150.5 million), down 73 percent from 724.3 billion won a year ago, according to its regulatory filing.
Revenue likely decreased 1.2 percent on-year to 5.07 trillion won. The data for net profit was not available.
“The second-quarter sales increased from the previous quarter, but profitability fell due to the impact of the Chinese COVID-19 lockdown and global logistics crisis and the timing gap in applying the increased costs to sales prices,” the company said in a release.
It also said the profit decline is not so big, given that last year’s second quarter profit included one-off gains from license settlement and provisions.
In April last year, LG Chem, Energy Solution’s parent firm, reached a 2 trillion-won settlement with domestic rival SK Innovation in the United States over trade secrets related to EV battery technology that LG accused SK of stealing when SK recruited LG employees en masse.
LG Chem put the gains from the settlement down as operating profit in last year’s second-quarter earnings.
The operating profit was 7.8 percent lower than the average estimate, according to the survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
The company will release its final earnings report later this month.
Shares in LG Energy Solution rose 0.81 percent to 373,500 won on the main Seoul bourse Thursday, underperforming the broader KOSPI’s 1.84 percent gain. The earnings guidance was released after the market closed.
(Yonhap)
