Seoul: LG Energy Solution Ltd., South Korea's premier battery manufacturer, announced a significant increase in its third-quarter operating profit, attributed largely to robust sales in the United States. The company reported a 34.1 percent year-on-year increase in operating profit, reaching 601.3 billion won (US$422.8 million) for the July-September period, up from 448.3 billion won a year earlier.
According to Yonhap News Agency, the surge in profits was primarily driven by heightened demand for energy storage systems (ESSs) in the U.S., alongside increased sales of small-sized cylindrical and pouch-type batteries for electric vehicles (EVs). Despite this growth in operating profit, LG Energy Solution experienced a 17.1 percent decline in sales, dropping to 5.69 trillion won from 6.87 trillion won, amidst a broader slowdown in EV sales.
Looking forward, LG Energy Solution projects continued sluggishness in the sales of prismatic EV batteries during the fourth quarter. This is attributed to major automakers revising their electrification strategies and maintaining low inventory levels. To counterbalance the anticipated decrease in EV battery demand, the company plans to concentrate on reducing fixed costs and securing additional ESS contracts in the U.S., capitalizing on its local production capabilities.
For the first nine months of the year, LG Energy Solution's operating profit is expected to have surged by 83.3 percent to 1.46 trillion won, compared to 800.9 billion won in the previous year. However, sales for this period are estimated to have declined by 8.5 percent to 17.53 trillion won, down from 19.16 trillion won the previous year. The company is poised to release its final earnings results for the third quarter later this month.