LG Energy Solution Ltd, a major battery maker in South Korea, announced an operating loss in the first quarter, amounting to 207.8 billion won (US$138.2 million). This marks a significant shift from the 374.7 billion won profit recorded in the same period last year. The company attributed this loss to the impact of the US-Iran war.
In addition to the operating loss, LG Energy Solution reported a 2.5 percent decrease in sales, totaling 6.55 trillion won for the January-March period. While specific data on net earnings was not available, the company’s financial performance was notably affected by the geopolitical tensions.
Industry experts noted that the higher production costs resulting from the Middle East crisis likely contributed to the company’s financial challenges. Moreover, initial investments in North American energy storage system (ESS) battery production facilities may have further impacted its overall performance.
LG Energy Solution disclosed that it received a tax credit of 189.8 billion won under the Advanced Manufacturing Production Credit (AMPC) as part of the U.S. Inflation Reduction Act. Excluding this credit, the company recorded an operating loss of 397.5 billion won in the first quarter, reflecting the broader financial implications of its operations.
LG Energy Solution is set to release its final earnings report in the near future. The company’s chairman, Koo Kwang-mo, emphasized the importance of strengthening the power infrastructure business to meet the growing energy demands driven by the artificial intelligence (AI) industry. As part of its expansion strategy, LG Energy Solution aims to enhance its presence in the North American energy storage system market.
