Seoul, April 7 – LG Energy Solution Ltd, South Korea's leading battery maker, announced on Tuesday that it had posted an operating loss in the first quarter, apparently due to the impact of the US-Iran conflict.
The operating loss amounted to 207.8 billion won (US$138.2 million) for the January-March period, compared to a profit of 374.7 billion won a year earlier, the company said in a regulatory filing.
Sales decreased by 2.5 percent to 6.55 trillion won. Data on net earnings was unavailable, according to Yonhap news agency.
The operating loss was 30.4 percent higher than the average estimate, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
The company will release its final earnings report later.
While LG Energy Solution did not provide details of the preliminary earnings report, industry analysts said the loss apparently occurred amid higher production costs triggered by the Middle East crisis.
The company's initial investments in its North American energy storage system (ESS) battery production facilities may also have affected its performance, they added.
LG Energy Solution said it received a tax credit of 189.8 billion won through the Advanced Manufacturing Production Credit (AMPC) under the U.S. Inflation Reduction Act.
Excluding the AMPC, the company recorded an operating loss of 397.5 billion won in the first quarter, the company said.
Earlier, LG Group Chairman Koo Kwang-mo called for efforts to strengthen the power infrastructure business to meet rising energy demand from the artificial intelligence (AI) industry.
Koo visited the headquarters of LG Energy Solution Vertech, a wholly owned U.S. subsidiary of LG Energy Solution Ltd, based in Massachusetts, as the South Korean battery maker aims to expand its presence in the North American energy storage system (ESS) market, according to LG.
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