LG Energy Solution Q3 operating profit up 25.7% to 756 billion won on record revenue
In short
LG Energy Solution reported preliminary third-quarter operating profit of 756 billion won, up 25.7% from a year earlier, on record quarterly revenue of 9.6434 trillion won, up 59.0%. US Advanced Manufacturing Production Credit (AMPC) subsidies contributed 416.9 billion won; excluding them, operating profit was 339.1 billion won. Its shares rose more than 6% in early trading on October 8, Chosun Ilbo reported.
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LG Energy Solution reported preliminary consolidated third-quarter operating profit of 756 billion won on October 8, up 25.7% from a year earlier, according to Yonhap, Asia Economy and Seoul Economic Daily. Revenue was 9.6434 trillion won, up 59.0% year on year and the company's highest quarterly revenue. Compared with the second quarter, revenue rose 27.6% and operating profit rose 567.3%, from 113.3 billion won. [ 1 , 3 , 4 , 5 , 6 , 7 ]
The result included 416.9 billion won from the Advanced Manufacturing Production Credit under the US Inflation Reduction Act. Excluding it, operating profit was 339.1 billion won and revenue 9.2265 trillion won, an operating margin of 3.7%, Asia Economy reported. For the first three quarters, cumulative operating profit was 661.6 billion won, down 54.9% from a year earlier, while cumulative revenue rose 26.1% to 23.7586 trillion won. [ 5 , 6 ]
Seoul Economic Daily attributed the record revenue to growth in both electric vehicles and energy storage systems. In EVs, mid-nickel volumes for Europe kept growing, and the restart of the North American joint venture with General Motors and the start of operations at the Hyundai Motor joint venture added to sales. In ESS, five sites built in North America came into full operation. Yonhap also cited expanded ESS production capacity centred on North America. [ 3 , 6 ]
Operating profit improved as higher North American ESS shipments eased fixed-cost burdens and rising shipments of pouch batteries for mid- to low-priced EVs in Europe improved plant utilisation, Seoul Economic Daily reported; Newsis also cited improved utilisation in North America and Europe. Compensation received from some EV customers was also reflected. [ 4 , 6 ]
LG Energy Solution shares rose more than 6% in early trading on October 8, Chosun Ilbo reported, saying the record revenue and operating profit in the 300 billion won range excluding US tax credits appeared to have lifted investor sentiment. Seoul Economic Daily said the industry expects revenue to keep growing as North American ESS production ramps up, though stabilisation costs remain. The company plans an earnings call on November 3. [ 6 , 8 ]
Why it matters
Seoul Economic Daily reported the record revenue was driven by growth in both electric vehicle batteries and energy storage systems, including five ESS production sites in North America coming into full operation. The result shows profit excluding US subsidies, which Chosun Ilbo said lifted investor sentiment, though cumulative operating profit for the first nine months is still down 54.9% from a year earlier.
Key facts
- Preliminary Q3 consolidated operating profit was 756 billion won, up 25.7% year on year. [ 1 , 3 , 5 , 6 , 7 ]
- Q3 revenue was 9.6434 trillion won, up 59.0% year on year and the company's highest quarterly revenue. [ 5 , 6 ]
- Compared with the second quarter, revenue rose 27.6% and operating profit rose 567.3%, from 113.3 billion won. [ 4 , 5 , 6 ]
- US AMPC subsidies under the Inflation Reduction Act accounted for 416.9 billion won; excluding them, operating profit was 339.1 billion won and revenue 9.2265 trillion won, an operating margin of 3.7%. [ 5 , 6 ]
- Cumulative operating profit for the first three quarters was 661.6 billion won, down 54.9%, while cumulative revenue rose 26.1% to 23.7586 trillion won. [ 5 ]
- Shares rose more than 6% in early trading on October 8. [ 8 ]
- The company plans a third-quarter earnings call on November 3. [ 6 ]
Confirmed by several sources
- Q3 operating profit was 756 billion won, up 25.7% year on year. [ 1 , 3 , 5 , 6 , 7 ]
- Q3 revenue was a quarterly record. [ 3 , 6 , 7 , 8 ]
- Operating profit rose 567.3% from the second quarter. [ 4 , 5 , 6 ]
- AMPC subsidies of 416.9 billion won were included; operating profit excluding them was 339.1 billion won. [ 5 , 6 ]
- Expanded ESS production in North America contributed to the result. [ 3 , 6 , 8 ]
Still unclear
- The amount of compensation received from some EV customers that was included in operating profit. Seoul Economic Daily reported the compensation was reflected but gave no amount or customer names.
- Details of the business outlook. The company is expected to give specifics at its November 3 earnings call; the outlook reported so far is from industry expectations cited by Seoul Economic Daily.
- Figures are preliminary. The results were reported as preliminary estimates.