L&F, Q1 Sales of 635.7 Billion KRW and Operating Loss of 203.8 Billion KRW

Completion of Inventory Valuation Due to Raw Material Price Decline
Operating Loss of 203.8 Billion Won, Reduced Deficit Compared to Previous Quarter

LNDF announced on the 9th that it posted sales of 635.7 billion KRW and an operating loss of 203.8 billion KRW for the first quarter of this year based on consolidated financial statements.

At the earnings briefing, LNDF explained that first-quarter sales decreased slightly by 3.3% compared to the previous quarter, mainly due to a decline in average selling prices caused by lower raw material costs. The operating loss was 203.8 billion KRW, a 27% increase from the previous quarter, narrowing the deficit. The cause of the loss was attributed to sales losses and inventory valuation losses of 83.2 billion KRW due to the decline in raw material prices, similar to the fourth quarter of last year. If there is no further drop in raw material prices, inventory valuation losses are expected to be completed in the first quarter, with no additional one-time costs anticipated.

On the other hand, shipments of the flagship product NCMA90 (cathode material with over 90% nickel) increased significantly in a positive trend. NCM523 (cathode material with a nickel:cobalt:manganese ratio of 5:2:3) also showed a clear recovery. Shipments in the second quarter are expected to grow by 25-30% compared to the previous quarter, driven not only by strong demand for cylindrical batteries but also by a sharp increase in demand for mid-nickel products destined for Europe. Accordingly, LNDF revised its shipment target from a -3% to -5% decline to a +3% to +5% increase compared to the beginning of the year plan.

Additionally, LNDF revealed that operating cash flow has greatly improved due to reduced raw material purchases and product inventory depletion. They minimized raw material purchases throughout the year while depleting inventory, which led to improved operating cash flow. This positive operating cash flow is expected to continue, and based on this, the company plans to reduce debt dependence and utilize funds for new business ventures.

LNDF is accelerating diversification of its customer base by securing large orders recently from domestic cell manufacturers and European clients. Leveraging technological and price competitiveness, many customers are engaged in additional supply discussions, and new product launches are scheduled for the second half of this year. Through diversification of customers and product portfolios, LNDF aims to secure market share and further strengthen its differentiated competitiveness.