Battery maker LG Energy Solutions Ltd (LGES) said on Tuesday that it aims to boost sales by about 8 percent in 2022, as a global shortage of chips could ease later this year on market conditions for electric vehicle (EV) batteries will pick up.
The newly listed South Korean company, which accounts for one-fifth of the global electric vehicle battery market, turned a profit in the October-December quarter, even as a chip shortage affecting automakers led to lower-than-expected battery demand.
LGES, which became South Korea’s second-largest public company last month in the country’s biggest-ever initial public offering, said in its first earnings report that it posted an operating profit of 76 billion won ($63.5 million) in the fourth quarter.
By comparison, two analysts polled by Refinitiv expected a profit of 150 billion won, compared with a loss of 479 billion won a year earlier.
Analysts pointed out that a global shortage of chips has hurt demand from automakers, hurting the company’s performance. LGES rivals SK On and Samsung SDI Co Ltd reported similar impacts on battery demand in the fourth quarter.
The company, which supplies companies including Tesla and General Motors, saw revenue rise 2 percent year-on-year to 4.4 trillion won.
LGES said it had set its capital expenditure budget for this year at 6.3 trillion won, up 58 percent year-on-year, to fund capacity expansion at its global manufacturing facilities to meet demand for its batteries.
“Longer term, LGES will continue to move forward with bold investment plans. We believe our future-ready business model will certainly help us lead the industry,” LGES CEO Youngsoo Kwon said in a statement.
LGES debuted on the market in late January, and its market value soared to about $98 billion, second only to Samsung
Electronics shares are listed on the local bourse, reflecting an optimistic outlook for the electric vehicle battery industry.
Its shares have since risen another 8.5% and gained a further 3.5% on Tuesday, compared with a 1.2% gain in the broader market KOSPI.
Global EV sales are estimated at 2.5 million in 2020 and are expected to grow more than 12-fold to 31.1 million by 2030, accounting for nearly a third of new vehicle sales, according to consultancy Deloitte.
In late January, LGES said it planned to invest a total of $2.6 billion with General Motors to build a third joint battery plant in the United States, with the goal of securing an annual battery capacity of about 50 gigawatt-hours (GWh) by 2025, enough for about 700,000 batteries. electric vehicle. The two companies have established two combined battery plants in Ohio and Tennessee.
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