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 27 (Korea Bizwire) — LG Energy Solution Ltd. (LGES) said Thursday its second-quarter operating profit more than doubled from a year earlier, driven by the continued strong electric vehicle (EV) demand.
Operating income reached 460.6 billion won (US$361.5 million) in the April-June period, compared with 195.6 billion won the previous year, the company said in a regulatory filing.
Sales rose 73 percent on-year to 8.77 trillion won, with net profit of 465.1 billion won, a more than fivefold increase from a year ago.
The operating profit has been revised down from 611.6 billion won it had given for the quarter in the earnings preview, as it reflected a one-off provision of 151 billion won to repay General Motors Co. for the recalls of its Bolt EVs equipped with LGES batteries over defects.
The operating income also included the 110.9 billion won tax credits it received under the U.S. Advanced Manufacturing Production Credit (AMPC) program, LGES said.
The AMPC gives tax benefits to EV battery makers for products manufactured in North America and other regions recognized by the policy.
Compared with the previous quarter, the operating profit fell 27.3 percent.
LGES said it expects the overall demand to slow in the second half, as the EV sales in Europe and China are forecast to decline.
The sharp fall in metal prices from the first half will likely affect the top line growth in the remaining months of the year as it will be reflected in the selling prices.
Despite the external uncertainties, LGES maintained its annual growth target of mid-30 percent for this year.
It plans to build a production line for the next-generation 46-millimeter-wide cylindrical batteries and transform part of the energy storage system line at its Nanjing factory in China to produce lithium iron phosphate (LFP), cheaper cells that are in high demand from automakers.
LGES said it had an order backlog of 440 trillion won as of end-June.
Shares in LGES sank 6.9 percent to 540,000 won on the main Seoul bourse Thursday, underperforming the broader KOSPI’s 0.44 percent gain. The earnings results were released before the market opened.
(Yonhap)
