Yuanta Securities Korea said on the 29th that the termination of a contract with U.S. battery pack maker FBPS will have a limited impact on LG Energy Solution's finances and profitability.
On the 26th, LG Energy Solution disclosed it would terminate a supply contract worth about 3.9 trillion won with FBPS. The termination was made by mutual agreement due to the customer's withdrawal from the battery business.
Yuanta Securities Korea explained that the terminated contract was a project led by the "new market team," not a specific original equipment manufacturer (OEM) team within LG Energy Solution's automotive division. The project supplies cells and modules to commercial-vehicle specialist packers for large buses and trucks, not the passenger car market.
Researcher Lee Anna at Yuanta Securities Korea said, "Because it was not for a specific customer but part of efforts to raise the utilization rate of the existing 'standardized line,' there is little risk that line operations will stop or idle facilities will arise even if the contract is terminated."
It also noted that the impact on finances and profitability from the termination is not significant. Cumulative sales generated since the contract was signed in the second quarter of last year amount to around 100 billion won, only about 3% of the total contract value.
Lee said, "The project was already progressing slowly and was not heavily reflected in major sales plans after 2026," adding, "The likelihood of lowering performance guidance due to this is also low." The termination does not entail negative factors such as asset impairment recognition or penalties.
LG Energy Solution is steadily pushing ahead with 46-phi orders from Rivian, Mercedes-Benz, and Ford without volatility.
Lee said, "We understand that adverse disclosures that could additionally emerge at year-end, such as winding down risky or uncertain projects, have been wrapped up," adding, "A swift shift to energy storage systems (ESS) and order prospects, as well as a corporate restructuring trend in 2026, point to a positive share-price trend through the first half of next year."