LG Energy Solution Q4 Operating Loss: What You Need to Know
LG Energy Solution Ltd., South Korea’s top battery manufacturer, reported a shift to an operating loss in the fourth quarter compared to a year prior, mainly due to declining electric vehicle sales. In the last three months of the year, the company recorded an operating loss of 225.5 billion won ($155 million), a sharp contrast to the 338.2 billion won operating profit in the same period last year.
Sales are anticipated to decrease by 19 percent to 6.45 trillion won in the fourth quarter from 8 trillion won a year ago. LGES attributes this downturn to the current state of the global electric vehicle market, described as a “chasm” phase marking the slowdown in EV adoption before widespread use.
To navigate through this challenging period, LG Energy Solution has revealed plans to broaden its non-EV sectors, such as energy storage systems, while enhancing its competitiveness as a car battery provider. Despite the temporary dip in EV demand, the company is determined to thrive in the market.
Looking ahead to 2024, LG Energy Solution expects a significant drop in operating profit by 73 percent to 575.4 billion won from 2.16 trillion won in the previous year. Sales are also projected to plummet by 24 percent to 25.62 trillion won from 33.75 trillion won in the same period.
To adapt to the current EV market situation, the company intends to repurpose some battery production lines in global facilities to focus on the production of Energy Storage Systems (ESS), a sector experiencing increased demand.
Currently, LGES operates three battery cell plants in North America and has additional plants under construction in various U.S. states and Canada through partnerships with prominent automakers. Aside from North America, the company also has manufacturing facilities in South Korea, Poland, China, and Indonesia.
LG Energy Solution is set to release its final earnings results later this month, offering a clearer picture of its financial performance during this challenging period.
