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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] LG Energy Solution announced on Thursday that it recorded a revenue of KRW 6.4512 trillion and an operating loss of KRW 225.5 billion for Q4 2023 in its preliminary earnings disclosure. Revenue dropped 19.4% year-on-year, and the company shifted into the red for operating profit. This marks its first quarterly loss in approximately three years, following the Q3 2021 loss caused by a KRW 620 billion provision for Bolt EV recalls. Excluding the KRW 377.3 billion subsidy received under the U.S. Inflation Reduction Act’s Advanced Manufacturing Production Credit (AMPC) during Q4, the actual loss would amount to KRW 602.8 billion.
For the full year 2023, LG Energy Solution reported total revenue of KRW 25.6196 trillion and an operating profit of KRW 575.4 billion. Compared to 2022, revenue declined by 24.1%, and operating profit plummeted by 73.4%.
The company attributed its poor performance to the ongoing "EV chasm," which led to a decline in high-margin product shipments due to reduced orders from key North American client GM. This was compounded by increased fixed costs and one-time expenses, such as year-end write-offs of obsolete inventory.
LG Energy Solution has already implemented a company-wide crisis management system. To cut costs, it has mandated economy-class travel for executives on flights under 8 hours and plans to reallocate existing staff internally instead of hiring new employees, except in select new business areas.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
