| Researchers at LG Energy Solution. Courtesy of LG Energy Solution |
LG Energy Solution, the rechargeable battery manufacturing affiliate of LG Group, said Tuesday that its sales and operating profit in the third quarter have reached an all-time high, propelled by robust sales in the U.S. and Europe.
Sales of 7.64 trillion won ($5.63 billion) in the July-September period were up 89.9 percent from 4.27 trillion won a year earlier and up 50.8 percent from 5.7 trillion won, the previous quarter.
Operating profit stood at 521.9 billion won in the same period, turning into a surplus from an operating loss of 372.8 billion won a year ago. The figure is up 166.8 percent from 195.6 billion won in the previous quarter.
The third quarter operating profit is the highest ever except for the 724.3 billion won logged in the second quarter of last year reflecting one-off, lump-sum incomes from a license deal settlement payment and corporate reserves.
LG Energy Solution CFO and Senior Vice President Lee Chang-sil said the strongest quarterly performance was due to the surge in demand for electric vehicle (EV) batteries in North America and Europe, and the swift supply of energy storage system (ESS) devices to the power grid in North America.
“The profitability of all products increased, a result of the firm capitalizing on the principle of economies of scale,” Lee said.
Sales grew, subsequently led by major raw input materialsprice hikes being offset by sales price increases, as well as an overall increase in productivity.
Also helpful were financial market conditions that continued to be favorable, borne out by a sustained depreciation of the Korean currency against the U.S. dollar.
The firm will strive to register an earnings report just as robust in the fourth quarter, he added, mostly through rapid expansion in the U.S. and Europe.
“We will fortify our competitiveness in North America, among other key areas of growth, despite unfavorable business conditions from within the country and abroad,” Lee said.
The average growth rate of the EV market in North America will be 33 percent through 2030, according to the firm. This rate is far faster than the rate of 26 percent expected in Europe and 17 percent in China. Further advancing these prospects are policies to bolster the green energy industry, including the U.S. Inflation Reduction Act (IRA).
“We will expand manufacturing capabilities in the said regions to best meet and serve the needs of customers in the key growth areas,” he said.