[Edaily Reporter JAEMIN SONG ] LG Energy Solution returned to profitability in the second quarter of this year, ending the string of losses that had continued since the fourth quarter of last year. The improvement in earnings was driven by expanded sales of energy storage systems (ESS) in North America and U.S. production subsidies. However, excluding the impact of subsidies, the company posted an operating loss in the 100 billion won range, leaving the recovery of core business profitability as a challenge.

LG Energy Solution announced on the 30th that it posted consolidated revenue of 7.5602 trillion won and operating profit of 113.3 billion won for the second quarter of this year. These figures are in line with the preliminary results announced on the 7th.

Although operating profit decreased by 77.0% compared to the same period last year (492.1 billion won), the company returned to profitability after posting an operating loss of 207.8 billion won in the previous quarter. This marks the first profit in three quarters since the third quarter of last year. Revenue increased by 24.8% year-over-year and 15.3% quarter-over-quarter.

The second-quarter results included a 241 billion won Advanced Manufacturing Production Credit (AMPC) under the U.S. Inflation Reduction Act (IRA). Excluding this, revenue was 7.3193 trillion won, and the operating loss was 127.7 billion won. While the company remained in the red excluding the subsidy, the scale of the loss decreased significantly from approximately 400 billion won in the previous quarter.

Amid slowing demand in the North American EV market and temporary operational adjustments at some joint-venture plants, increased ESS shipments in North America are seen as having helped shore up the company’s performance. The burden of initial costs incurred during the expansion of ESS production capacity has eased, and shipments of cylindrical EV batteries and pouch-type batteries for mid- to low-priced EVs in Europe also increased.

However, the company was unable to move out of the red in terms of net income. LG Energy Solution’s net loss for the second quarter was 328.6 billion won, marking a shift to a loss from the 90.6 billion won profit recorded in the same period last year. Compared to the previous quarter’s net loss of 944.0 billion won, the loss decreased by 65.2%.