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LG Energy’s Q3 profit slumps 40% amid EV slowdown

The South Korean battery maker’s operating profit for the three months ended September 30 was 448.3 billion won (USD 323 million), the company said, higher than analyst estimates of 440.3 billion won.

South Korean battery maker LG Energy Solution (LGES) reported a 39% drop in profit from last year amid a sluggish demand for electric vehicles.

LGES’s operating profit for the three months ended September 30 was 448.3 billion won (USD 323 million), the company said, higher than analyst estimates of 440.3 billion won.

Its third-quarter net profit surged 34% from the same period last year. Net profit for the three months ended September increased to 561.3 billion won (USD 404 million) compared to 420.5 billion won from last year, the company said.  

“Increased sales of batteries for energy storage systems in advanced markets and companywide cost reductions resulted in quarterly profit gains,” the company said in a statement.

Revenue fell 16.4% to 6.9 trillion won during the same period. The company has been struggling with diminishing orders for batteries as electric carmakers scale back their ambitions globally. 

“Competition in the global EV market is seen intensifying as macroeconomic uncertainties and geopolitical risks persist at a time when Chinese manufacturers are increasing their exports and our customers are announcing their plans for battery internalization,” LGES’s Chief Financial Official Lee Chang Sil said in the conference call. “The result of the US presidential election will also have a significant impact on the market, so it’s very difficult to provide an outlook for next year.”

The South Korean company plans to lower costs, improve overall operational efficiency and diversify its products to sustain its profitability, he added. 

“We will minimize capital expenditure by excluding essential investments and adjust the pace accordingly,” Lee Chang Sil said. “The scale of capital expenditure next year could be significantly reduced compared to this year.”

“Although rapid changes in the external environment are expected, we will respond agilely to these changes with meticulous strategies and elevate customer value based on an overwhelming product portfolio to emerge as a leading company in the global battery market,” Kim Dong-myung, president of LGES, said.


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