LG Chem's Q1 2020 financial report reveals several interesting things about the battery business of the South Korean company.
The overall revenues increased in Q1 by 7.5% year-over-year to 7,116 billion KRW ($5.8 billion), although the profits decreased:
- operating profits: 237 billion KRW ($193 million), down 15.8% year-over-year
- net income: 36 billion KRW ($29 million), down 82.9% year-over-year
We are of course the most interested in the "Energy Solutions", which in Q1 was responsible for 31.8% of overall LG Chem revenues:
- Revenues: 2,261 billion KRW ($1.84 billion), up 37% year-over-year
- operating profits: -52 billion KRW (-$42 million) or -2.3% of sales
The battery sales improved (despite Q1 seasonality and COVID-19) and despite the fact that the business remains unprofitable, the loss is actually three times lower than a year ago.
LG Chem expects that sales will further increase, so maybe it will finally provide consistent profits (at least the Q3 2019 was positive).
Here is a more detailed look at the results. As we can see, in 2018 the company was able to achieve an average of 3.2% operating profit, while in 2019 it was negative at 5.4%.
CAPEX and R&D expenses show that Energy Solutions is the segment in which LG Chem invests the most of its resources: