LG Energy Solution Q1 profit more than doubles, in line with forecast
SOUTH Korea’s LG Energy Solution on Wednesday (Apr 26) posted a 145 per cent jump in quarterly profit, as the battery maker factored in subsidies from the US Inflation Reduction Act and solid sales of electric vehicles (EVs) in US and European markets.
The company, which supplies Tesla, General Motors and others, reported an operating profit of 633 billion won (S$633.1 million) for the January-March period, versus 259 billion won a year earlier.
That compared with an average analyst forecast of 633 billion won compiled by Refinitiv SmartEstimate.
Revenue for the quarter rose 101 per cent to 8.7 trillion won, LG Energy said in a regulatory filing.
Analysts attributed the jump to the solid sales of EVs in the United States, where EV consumers could receive up to US$7,500 US EV tax credit under the Inflation Reduction Act, which would help boost sales of EVs.
The US Inflation Reduction Act requires 50 per cent of the value of battery components to be produced or assembled in North America to qualify for a US$3,750 credit and 40 per cent of the value of critical minerals sourced from the United States or a free trade partner also for a US$3,750 credit.
About 80 per cent of EVs that are eligible for US federal tax credits use batteries from South Korea’s three major cell makers — LGES, Samsung SDI and SK On, according to an analysis from brokerage Korea Investment & Securities.
Shares of LG Energy Solution was trading up 0.7 per cent, versus benchmark KOSPI’s 0.1 per cent rise as of 0044 GMT. REUTERS
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