LG Energy Solution Q3 Operating Profit Hits 601.3 Billion Won, Up 34.1% YoY on ESS Demand Growth

Profit Maintained Even Excluding U.S. Subsidies

LG Energy Solution announced on the 13th that its consolidated operating profit for the third quarter of this year reached 601.3 billion won, a 34.1% increase compared to the same period last year, according to a provisional tally. The company continues to maintain profitability, driven by growing demand for energy storage systems (ESS).

LG Energy Solution Michigan Holland Plant in the United States. Photo by LG Energy Solution, Yonhap News Agency

The amount of Advanced Manufacturing Production Credit (AMPC) under the U.S. Inflation Reduction Act (IRA) was 365.5 billion won, and operating profit excluding this subsidy stood at 235.8 billion won. Excluding AMPC, the company recorded an operating profit of 1.4 billion won in the previous quarter for the first time in six quarters, and has now maintained a profit excluding subsidies for two consecutive quarters.

Despite an increase in local ESS production shipments, the subsidy amount decreased slightly from the previous quarter (490.8 billion won) due to a reduction in orders from major electric vehicle customers following the end of EV purchase subsidies last month.

Revenue was 5.6999 trillion won, down 17.1% compared to the same period last year.

Previously, an LG Energy Solution representative stated at the second quarter earnings announcement, "In addition to ongoing efforts to reduce fixed costs, the company saw improved results due to a full-scale profit realization from North American ESS shipments and improvements in the small battery business driven by increased orders for cylindrical EV and pouch batteries." The representative added, "In the second half of the year, we plan to implement various measures such as resource reallocation and cost efficiency initiatives to minimize the burden of fixed costs."