SEOUL, Oct. 26 (Korea Bizwire) — LG Energy Solution Ltd. (LGES), a major secondary battery maker, said Wednesday it shifted to the black in the third quarter from a year earlier on the back of robust demand in electric vehicle (EV) batteries and a weaker Korean won currency.
LGES said it will continue its focus on North America, a fast-growing EV market, and step up to build stable supply chains for raw materials to meet the requirements in the new U.S. policy on EV and green energy.
Net profit came to 187.7 billion won (US$131.3 million), swinging from a loss of 205.8 billion won a year earlier, the company said in a regulatory filing.
Operating income reached 521.9 billion for the July-September period, compared with a loss of 372.8 billion won a year ago. Sales rose 89.9 percent to 7.64 trillion won, the largest quarterly number.
“EV battery output for customers in North America and Europe increased, and the supply of ESS (energy storage system) products for power grids in North America began in earnest,” LGES CFO Lee Chang-sil said.
“The reflection of raw materials price hikes in the selling prices improved productivity, and the favorable foreign exchange rate from a strong dollar also contributed to improving the bottom line,” he said.
LGES also revised up its revenue forecast for this year to 25 trillion won, from the last estimate of 22 trillion won, given the burgeoning EV demand, especially from the United States.
It said it expects an annual 33 percent growth in the North American EV market by 2030, faster than Europe and China. It aims to boost production capacity in North America to 250-260 gigawatt hours.
Its order backlog currently stands at 370 trillion won, LGES said, growing from over 310 trillion won it gave out in the previous quarter. North America accounts for 70 percent.
The world’s second-largest battery manufacturer counts Tesla Inc., General Motors Co. and Ford Motors Co. as its clients, among others.
LGES plans to expand partnerships with or consider investment in raw materials developers in North America as well as countries that have free trade pacts with the United States, in line with the Inflation Reduction Act (IRA), a new U.S. law enacted in August, requiring EV batteries to be made with a certain portion of minerals produced or processed in those regions.
“We’ll raise the portions to 63 percent for cathodes and 72 percent for core minerals, for the localization of the raw material supply in North America,” LGES said.
Regarding the plan under review for a new plant in Arizona, LGES said no decision has been made yet and it is still assessing various options.
The battery maker announced a plan to build its second cylindrical battery plant in the U.S. state but later said it was rethinking the project amid rising costs.
Shares in LG Energy Solution jumped 3.52 percent to 529,000 won on the main Seoul bourse, outperforming the broader KOSPI’s 0.65 percent gain. The earnings results were released after the market opened.