LG Chem increased sales and profits in the challenging second quarter of 2020, in big part thanks to its rapidly growing EV battery business.
The company's overall revenues increased in Q2 by 2.3% year-over-year to 6,935 billion KRW ($5.85 billion):
- operating profits: 572 billion KRW ($480 million), up almost 132% year-over-year
- net income: 419 billion KRW ($350 million), up almost 400% year-over-year
The revenues in the "Energy Solutions" segment were a record high and not only that, LG Chem is finally making money on EV batteries, which is a great sign for the future.
- Revenues: 2,823 billion KRW ($2.38 billion), up 40.5% year-over-year
"Energy Solutions" stands for 40.7% of total revenues
- operating profits: 156 billion KRW ($130 million) or 5.5% of sales
The company said that those results are the fruit of huge demand in Europe (and expanding gigafactory in Poland), huge demand in China (cylindrical batteries for Tesla), as well as large-scale ESS projects in North America.
The positive trend should continue in Q3:
"In terms of profitability, productivity was improved and costs were cut thereby improving yield at the Poland plant, resulting in the automobile battery business having earning surpluses and achieving its best performance yet.
It is expected that sales will grow and strong profitability will continue in Q3 by increasing shipments of automobile batteries to Europe and increasing sales of cylindrical batteries for automobiles."
A quick look at the overall results reveals that soon the "Energy Solutions" should be the biggest part of the company: