Seoul, April 7 (IANS). South Korea’s battery giant LG Energy Solutions Ltd on Tuesday estimated an operating loss in the January-March quarter, apparently due to the global impact of the US-Iran war.
The company said in a regulatory filing that it had an operating loss of 207.8 billion won ($138.2 million) in the January-March period, compared with a profit of 374.7 billion won in the same period last year.
The company’s sales declined 2.5 percent to 6.55 trillion won. According to Yonhap news agency, net profit figures have not been released yet.
The operating loss was 30.4 percent larger than the market average estimate, according to a survey conducted by Yonhap Infomax, a financial data firm of Yonhap news agency. The company will release its detailed final report later.
Although the company did not provide much information in its preliminary earnings report, industry experts believe that the loss was due to increased production costs due to the Middle East crisis.
Additionally, early investments in energy storage system (ESS) battery production in North America may also impact the company’s performance.
The company said it received a tax credit worth 189.8 billion won through the Advanced Manufacturing Production Credit (AMPC) under the US Inflation Reduction Act.
If this tax credit is removed, the company’s operating loss reaches 397.5 billion won.
Earlier, LG Group Chairman Koo Kwang-mo had said that it is necessary to strengthen the power infrastructure business in view of the increasing energy demand from the Artificial Intelligence (AI) industry.
He also visited LG Energy Solutions Vertec (a wholly owned subsidiary of the company) based in Massachusetts, USA, as the company looks to expand its presence in the Energy Storage System (ESS) market in North America.
–IANS
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