Battery firm LG Energy Solution's Q4 profit up 43% on higher US output
Reuters
Published Jan 25, 2024 19:27
Updated Jan 25, 2024 22:10
By Heekyong Yang and Joyce Lee
SEOUL (Reuters) - South Korean battery firm LG Energy Solution (LGES) posted on Friday a rise of 43% in quarterly profit, helped by increased output from its U.S. joint-venture factory with General Motors (NYSE:GM).
The supplier of Tesla (NASDAQ:TSLA), GM, Volkswagen (ETR:VOWG_p) and other automakers reported operating profit of 338 billion won ($252.40 million) for the October-December period, up from 237 billion a year earlier.
The profit is in line with a company estimate this month of 338 billion won, but exceeds a figure of 298 billion won compiled by LSEG SmartEstimate, which is weighted toward analysts who are more consistently accurate.
However, fourth-quarter profit dropped more than half from the previous quarter, due to weak demand for electric vehicles (EV) in Europe.
"A temporary slowdown of global EV battery demand growth is expected due to original equipment manufacturers' (OEMs')conservative inventory control along with continued metal price decline," LGES said in a statement. OEMs refer to automakers.
Risk factors this year would be the changing pace of EV transition plans by automakers, growing competition in Europe as well as political uncertainties, including the U.S. presidential election, it added.
LGES' forecast of this year's market outlook comes after its automaker customer Tesla warned on Wednesday of a sharp slowdown this year in sales growth.
On Thursday, Hyundai Motor Co also flagged the slowing of EV market sentiment.
Revenue for the quarter fell 6.3% year-on-year to 8 trillion won.
Shares of LGES were trading up 2.6% in the morning trade after the quarterly results, versus a rise of 0.4% in the benchmark KOSPI.
($1=1,339.1500 won) (This story has been refiled to add dropped word 'demand' in paragraph 5)
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Written By: Reuters
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