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LG Energy Solution (LGES; KRX: 373220) recently released its 2022 first-quarter financial report. The sales increased by 2.1% compared to 2021Q1 (4254.1 billion KRW) and decreased by 2.2% compared to 2021Q4 (4.43 trillion KRW). Operating profit decreased by 24.1% from the same period last year (341.2 billion KRW) and increased by 242% from the previous quarter (75.7 billion KRW), and the operating profit margin was 6%.

Due to the conflict between Russia and Ukraine, the company's profitability has been impacted by shortages of automotive chips and price volatility of critical battery metals, including lithium, nickel, copper, and aluminum. LG ES plans to expand long-term supply contracts and strategic equity investments with primary raw materials to improve profitability. LG ES adds copper, aluminum, and manganese to the pass-through cost plans to cover price fluctuations, including lithium, nickel, and cobalt. The company plans to build a 'smart factory' based on automation, information, and intelligence to reduce costs and strengthen manufacturing competitiveness at all global production bases. To improve its products' competitiveness, the company decided to develop new materials, such as cobalt-free cathodes for pouch cells and unique thermal runaway reduction solutions. In the case of cylindrical cells, new form factors with high capacity are expected.

This year, the company plans to invest about 7 trillion KRW in expanding battery production facilities. It includes new joint ventures and factories in North America and increasing production lines of cylindrical cells in China. LG Energy Solution declared its production expansion from 200 GWh this year to 520 GWh by 2025. Meanwhile, the sales target for this year is 19.2 trillion won, an increase of about 7.3 % from last year (17.9 trillion won).

About LG Energy Solution:

LG Energy Solution (KRX: 373220) is a global leader in delivering advanced lithium-ion batteries for Electric Vehicles (EV), Mobility & IT applications, and Energy Storage Systems (ESS). With 30 years of experience in advanced battery technology, it continues to overgrow towards realizing sustainable life. With its robust global network that spans the US, Europe, Asia, and Australia, LG Energy Solution is more committed to developing innovative technologies that bring future energy a step closer. Under its ESG vision, "We CHARGE toward a better future," LG Energy Solution is doing its utmost to prioritize the environment, fulfill social responsibilities, and shape a sustainable future. For more information, please visit https://www.lgensol.com.

Source: LG Energy Solution