SEOUL :South Korean battery maker LG Energy Solution (LGES) on Wednesday posted a 138 per cent rise in first-quarter profit, as favourable foreign exchange rates helped cushion the impact of slowing electric vehicle sales growth in major overseas markets.
LGES, whose customers include Tesla, General Motors and Hyundai Motor, reported operating profit of 375 billion won ($261.96 million) for January-March, in line with its earlier guidance.
The result compared with 157 billion won a year earlier.
The battery maker in a regulatory filing said it would have booked an 83 billion won operating loss without a tax credit received under the U.S. Inflation Reduction Act.
Revenue rose 2.2 per cent from a year earlier to 6.3 trillion won.
LGES’ share price was down 2.1 per cent after the results announcement versus a 0.1 per cent rise in the benchmark KOSPI.
The South Korean won’s average exchange rate was 1,452.9 per U.S. dollar in the first quarter, 8.5 per cent weaker than the year-earlier average of 1,329.4. That means LGES could buy more won with dollars earned from U.S. sales.
Also boosting earnings were solid EV sales reported by customer GM, analysts said. The U.S. automaker reported 94 per cent on-year domestic growth at 31,887 EV in the first quarter.
GM on Tuesday retracted its annual forecast, reflecting uncertainty surrounding the impact of a trade war instigated by the administration of U.S. President Donald Trump. The automaker also pushed back its investor call due to changes to the United States’ import tariff policy.
The same day, Trump signed a pair of executive orders to soften the blow of new tariffs on the auto industry, offering a mix of tax credits and relief from other levies on materials.
($1 = 1,431.5000 won)
