SEOUL, South Korea — LG Energy Solution Ltd. (373220. KS) reported a 23.4% decrease in first-quarter consolidated revenue to KRW 6.1287 trillion (US$4.46 billion) and a 53.5% drop in operating profit to KRW 157.3 billion (US$114.5 million).
The South Korean battery manufacturer attributed the decline in revenue to a weakening of demand in the upstream market and a prolonged impact of metal prices on average selling prices.
Operating profit was affected by a fixed cost burden resulting from a decrease in revenue, an adjustment to the utilization rate due to a slowdown in demand for electric vehicles, and increased metal expenses resulting from a lag in the consumption of raw material inventories.
Despite the challenging market conditions, LG Energy Solution made significant progress in expanding its U.S. operations.
This included the successful start of production at its GM joint venture plant in Tennessee and the development of its first stand-alone cylindrical and ESS battery plants in North America at its Arizona manufacturing complex.
Additionally, the company established strategic partnerships and ventured into new business areas, such as battery software and services, intending to create a virtuous cycle for growth.
This included a partnership with Qualcomm Technologies and the launch of 20 battery-swapping stations in Seoul.
To strengthen its fundamental competitiveness, LG Energy Solution plans to improve investment efficiency by adjusting the size and speed of capital expenditure, optimizing capacity efficiency and operational cost structure, and reducing raw material costs through direct sourcing and value chain investments.
Moreover, the battery manufacturer aspires to diversify its global production footprint through strategic partnerships with joint venture partners and expand its product line, leveraging its technological leadership in areas such as 46-Series cylindrical batteries and LFP batteries for energy storage systems.
US$1=KRW1,373.67
