LG Energy Solution flags Q1 operating loss on weak EV demand

SEOUL, April 7 (Reuters) - South ‌Korean battery ​maker ​LG Energy Solution (LGES) said on Tuesday it expects to post a first-quarter operating loss of 208 billion won ($138.16 ‌million), as weaker demand from electric vehicles (EVs) makers weighed ⁠on earnings.

That compared with an LSEG SmartEstimate forecast of a 160 billion ‌won loss, which was weighted ‌toward analysts who are more consistently accurate.

Here are some details:

* LGES, which supplies Tesla, General Motors and HyundaiMotor among others, has ​been grappling with weaker EV batterydemand, with one of its major customers GM idling a Detroit EV plant until April. * Revenue ⁠would likely fall 2.5% to 6.6 trillion won from ayear earlier, LGES said. * The quarterly ​earnings guidance includes tax creditsprovided under the U.S. Inflation Reduction Act for thecompany's battery production in the ​United States, LGES said ina regulatory ‌filing. Excluding the credits, LGES would haveposted an operating loss of 398 billion won. * To offset ⁠weakness in EV batteries, LGES is focusing ongrowing demand for energy storage systems (ESS), driven byrising electricity needs for AI data centres. * In February, ⁠LGES said it aims to triple its ESS revenuethis year from a year ​earlier. Nomura estimated the company'sESS revenue at about 2.8 trillion won in 2025. * Analysts also said a U.S. House bill, the CHARGE Act,introduced last ‌month to ban imports of certain Chinese-madeenergy storage systems, could create opportunities for SouthKorean battery makers. ‌The bill cite concerns that energystorage systems manufactured in China and ⁠imported to the UnitedStates ‌may include remote monitoring ​capabilities. * LGES is set to report details earnings on April 30.

($1 = 1,505.5000 won)

(Reporting by Heekyong YangEditing by ‌Ed Davies)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• SanDisk and Micron surge as Apple confirms memory price pass-through
• SpaceX receives Baa1 rating from Moody's with stable outlook
• Goldman Sachs Starts Infratil New Zealand (IFT:NZ) at Buy