LG Energy Solution’s R&D Campus Daejeon is shown in this photo provided by LG Energy Solution.
SEOUL, July 7 (Korea Bizwire) — LG Energy Solution Ltd. (LGES) said Friday its second-quarter operating profit is expected to have more than tripled from a year earlier on the back of strong demand for electric vehicle batteries.
Operating income reached 611.6 billion won (US$468.7 million), compared with 195.6 billion won the previous year, the company said in a regulatory filing.
Sales increased 73 percent on-year to 8.77 trillion won. The data for net income was not available.
The operating profit, however, missed the market forecast, coming 9.5 percent lower than the average estimate compiled by Yonhap Infomax, the financial data firm of Yonhap News Agency.
LGES said the operating income includes the 110.9 billion won it received in U.S. incentives from the Advanced Manufacturing Production Credit under the new Inflation Reduction Act on promoting green technologies.
Analysts attributed the lower-than-expected profit to the supply in Europe that may have slowed compared to the previous quarter as customers delayed purchases as metal prices fell.
“We believe that European customers expected secondary battery prices to drop amid falling mineral prices and slightly delayed their purchases,” Cho Chul-hee, an analyst at Korea Investment & Securities Co., said in a note.
“The battery supply of the joint venture with General Motors, Ultium Cells in North America, was probably smaller than expected, as GM’s output fell short of the targets,” Cho added.
The supply to Tesla Inc. has most likely increased stably, with the world’s No. 1 electric car maker having reported the record delivery of its vehicles in the second quarter that beat market estimates, analysts said.
Shares in LGES closed down 0.53 percent to 562,000 won on the main Seoul bourse Friday, versus the broader KOSPI’s 1.16 percent decline.
The company will release the final earnings report later this month.
(Yonhap)
