LG Energy Solution Q4 Revenue Up 10.2% on Rising EV Demand; Expects 8% Revenue Up in 2022 on Ease of Chip Shortage 

$10.5 billion LG Energy Solution (LGES) reported strong growth during the fourth quarter of 2021, with consolidated revenue up 10.2 per cent to KRW 4.44 trillion, from the previous quarter, mainly driven by robust demand of pouch and cylindrical battery cells for electrical vehicles (EVs) and small-sized pouch batteries for IT devices.

The lithium-ion (Li-Ion) battery maker posted a consolidated operating profit of KRW 76 billion, since turning to profit in Q4.

For the full year, the South Korean company’s revenue grew 42 per cent to KRW 17.85 trillion, as compared to the previous year.

Also, its annual operating profit stood at KRW 768.5 billion while its operating profit margin was 4.3 per cent.

The company in a statement said that “the booming performance comes on the back of solid demand for electric vehicles as well as cylindrical batteries for EVs and light EVs.”  

“The annual earnings result took multiple factors into account, including a voluntary recall with General Motors for Chevrolet Bolt EV batteries, a recall of batteries for an energy storage system (ESS) and a lump-sum payment of license fee from another industry player. Were it not for these one-time factors, LG Energy Solution's annual revenue would stand at KRW 16.86 trillion, its operating profit at KRW 917.9 billion,” it added.

Commenting on the performance, Youngsoo Kwon, CEO of LG Energy Solution, said “LG Energy Solution will excel by prioritizing the fundamentals of quality and securing profitability.”

“LGES will continue to move forward with bold investment plans needed in the long run. We are confident our business model of preparing for the future will definitely help us lead the industry,” he added.

On the 2022 outlook, the company is expected that its revenue will grow 8 per cent on-year to KRW 19.2 trillion, on expectations of steady EV market growth. Without the aforementioned one-off factor, the revenue would be 14 per cent higher, on-year, it added.

Additionally, the company is also planning to steadily expand its manufacturing capacity in 2022 as its major partner automakers plan to introduce new line-ups of EVs.

Besides, the battery maker also believes that the market condition will improve as the global chip shortage is expected to ease in the latter half of the year.

Ahead of the upcoming rise in global EV sales, the company has been investing KRW 6.3 trillion in capital expenditures, up 58 per cent, as compared to the previous year.

In line with this, the company, which accounts for a fifth of the global battery market, aims to finance capacity expansion at its global manufacturing facilities including joint venture (JV) plants with GM.