LG Chem and its LG Energy Solution battery division both achieved an outstanding first quarter of 2021, with record sales and operating profits.
It's great news as the highly profitable EV battery business will encourage to make further investments in additional manufacturing capacity, as well as research on even better batteries.
The overall results for LG Chem:
- revenues: 9,650 billion KRW ($8.66 billion), up 43.4% year-over-year
- operating profits: 1,408 billion KRW ($1.26 billion), up 584% year-over-year
- net income: 1,371 billion KRW ($1.23 billion)
14.2% net margin
LG Chem's LG Energy Solution
Energy Solution's specifically noted record revenues and profits as well. This part of the company is now highly profitable (8.0% operating margin) with good perspectives for further growth.
- revenues: 4,254 billion KRW ($3.82 billion), up 88% year-over-year
"Energy Solution" stands for 44% of total revenues
- operating profits: 341 billion KRW ($310 million) or 8.0% of sales
"The Energy Solution recorded its highest-ever quarterly sales and operating profit with sales of KRW 4.25 trillion and operating profit of KRW 341.2 billion. Profitability improved by expanding shipments of EV batteries and continuously improving yields and reducing production costs.
Sales of automobile batteries and cylindrical batteries are expected to grow in the second quarter with increased sales of electric vehicles, and efforts to improve profitability will continue through early stabilization of expansion lines and cost reduction."
More detailed view:
LG Chem's LG Energy Solution has manufacturing plants in South Korea, the U.S., Poland and China.
In the U.S., LG Energy Solution has also a 50/50 joint venture with GM - Ultium Cells LLC, which soon will launch its first manufacturing plant in Lordstown, Ohio. The second plant of the joint venture was announced in April. It will be built in Spring Hill, Tennessee.
A noticeable boost of $1.8 billion for the further investment plan in the U.S. (estimated at $4.5 billion) comes from the settlement with SK Innovation.
In China, LG Energy Solution supplies cylindrical cells for Tesla, while in the other markets most customers are using punch battery cells.