LG Energy Solution says Q4 operating loss likely $83.8 million, missing expectations
FILE PHOTO: Battery cells with the logo of LG Energy Solution are displayed at the company headquarters in Seoul, South Korea, April 23, 2024. REUTERS/Kim Hong-Ji/File Photo
SEOUL, Jan 9 : South Korean battery maker LG Energy Solution (LGES) said on Friday it expects to report a fourth-quarter operating loss of 122 billion won ($83.8 million), as weaker demand from makers of electric vehicles weighed on results. That compared with an LSEG SmartEstimate forecast - weighted toward analysts who are more consistently accurate - of a loss of 77 billion won.
The quarterly earnings guidance includes tax credits provided under the U.S. Inflation Reduction Act for the company's battery production in the United States, it said. Excluding the credits, LGES would have posted an operating loss of 455 billion won, it said.
The firm will announce final results on January 29.
Seoul-based LGES, a supplier to automakers including Tesla and General Motors, is grappling with weaker demand for battery-powered vehicles and U.S. President Donald Trump's policy changes on green energy.
General Motors said on Thursday it would take a $6 billion writedown on some EV investments, the latest car company to pull back from EVs in response to the Trump administration's policies and cooling demand.
Last month, LGES reported that a battery contract worth 9.6 trillion won with Ford has been cancelled after Ford slashed its outlook for the EV market, followed by another cancellation with Freudenberg Battery Power Systems worth 3.9 trillion won.
LGES plans to sell some factory assets in the United States to Japanese carmaker Honda Motor, citing the need to improve business efficiency.
The company may soon announce the suspension of operations at its plant jointly run with GM in the United States, which would cause at least 1 trillion won in temporary cost, according to a January 2 note from Seoul-based NH Investment & Securities.
GM said in October it would halt battery cell production at its two U.S. joint-venture battery plants with LGES - in Tennessee and Ohio - in January for about six months.
($1 = 1,455.6000 won)
