SLUGGISH demand for electric vehicles (EVS) haunted South Korean battery maker LG Energy Solution, dragging its profits down by almost 40 per cent from a year earlier.
LG Energy’s operating profit for the three months ended Sep 30 was 448.3 billion won (S$426 million), according to a company statement on Monday (Oct 28). While that was higher than analyst estimates of 440.3 billion won, it was down 39 per cent from a year earlier, according to data compiled by Bloomberg.
Excluding tax credits from the US Inflation Reduction Act, LG made a 17.7 billion won operating loss. Revenue dropped 16.4 per cent to 6.9 trillion won.
The South Korean company has been grappling with dwindling orders for batteries as falling customer demand for EVs prompts automakers around the globe to scale back their electric ambitions. Car companies are also facing mounting uncertainties as the US heads for its presidential election next month, with Donald Trump threatening to scrap the Biden administration’s EV policies.
Earlier this year, LG Energy lowered its outlook for American EV output growth for this year to about 20 per cent from its previous forecast of as much as 35 per cent. The company also see European EV production growth in the mid-teens, weaker than its previous estimate of up to 25 per cent.
To minimise the impact from slowing EV demand, the company is looking to diversify its business portfolio, with a plan to more than double sales by 2028 through accelerating production of other applications such as storage systems, it said earlier this month.
LG Energy shares added 1 per cent in Seoul trading on Monday, following the release of its earnings. The stock rose 27 per cent during the third quarter, snapping five straight quarterly declines. BLOOMBERG
