LG Energy Solution (373220.KS) surpassed 7 trillion won in quarterly revenue for the first time in two and a half years, driven by expanded volumes of mid- to low-priced electric vehicle batteries and energy storage systems (ESS).
The company said second-quarter revenue reached 7.5602 trillion won on a consolidated basis. That marked a 24.8% increase from a year earlier and exceeded 7 trillion won for the first time in two and a half years since the fourth quarter of 2023. Excluding the effect of the Advanced Manufacturing Production Credit (AMPC) under the U.S. Inflation Reduction Act (IRA), revenue still reached 7.3193 trillion won.
Second-quarter operating profit was 1133 billion won, a 77% decline from a year earlier, and preliminary figures showed a loss of 127.7 billion won when the AMPC portion is excluded. Still, the company moved out of the operating loss that had continued for two consecutive quarters from the fourth quarter of last year.
LG Energy Solution said revenue grew as volumes of mid- to low-priced EV battery products increased, centered on European customers. An increase in production volume following the expansion of ESS production facilities in North America also lifted revenue. However, operating profit declined as demand in the North American EV market, its core market, remained sluggish and the operation of Ultium Cells, its joint venture with General Motors (GM), was delayed beyond schedule.
The industry expects LG Energy Solution to expand profit in the second half based on its ESS order performance. Lee Jin-myung, a researcher at Shinhan Investment Corp., said, "In the second half, ESS is entering a phase where orders and earnings growth begin in earnest, with large-scale orders continuing, and ESS revenue is expected to increase 46% compared with the first half." He added, "Profitability was weak through the second quarter due to line conversion costs and other factors, but a turnaround is expected on higher utilization rates and expanded AMPC."
