The overall results for LG Chem:
- revenues: 11,456 billion KRW ($9.74 billion), up 65% year-over-year
- operating profits: 2,140 billion KRW ($1.82 billion), up 274% year-over-year
- net income: 1,566 billion KRW ($1.33 billion)
13.7% net margin
LG Chem's LG Energy Solution
LG Energy Solution's specifically noted record revenues and profits in the Q2. However, the results include a one-off settlement payment from SK Innovation, which significantly boosted the outcome. There was also a one-off cost related to recall of batteries for energy storage systems.
- revenues: 5,131 billion KRW ($4.36 billion), up 82% year-over-year
"Energy Solution" stands for 45% of total revenues
- operating profits: 724 billion KRW ($620 million) or 14.1% of sales
Excluding the one-off item, the results were stable compared to the previous two quarters. The reasons behind that are challenges in the automotive industry (mainly lack of chips to produce more EVs):
- revenues: 4,139 billion KRW ($3.52 billion), up 47% year-over-year
"Energy Solution" stands for 40% of total revenues
- operating profits: 250 billion KRW ($210 million) or 6.0% of sales
"LG Energy Solution recorded revenue of 5.131 trillion KRW and operating profits of 815.2 billion KRW. Though there was some impact due to the supply and demand of front industries and setbacks with customer demand, they were recognized as temporary factors, thus improving revenue and profitability."
The company expects that we will see further increases in sales in the third quarter, as the automotive industry should finally be able to increase vehicle production.
"In Q3, revenue is expected to grow for automobile batteries and small batteries for IT as EV sales increase, and plans are to continue efforts to improve profitability through the early stabilization of additional lines, cutting costs, etc."
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.
In China, LG Energy Solution supplies cylindrical cells for Tesla, while in the other markets most customers are using pouch battery cells.