LG Energy Solution recorded surprising performance in the first quarter of this year, thanks to the effects of the U.S. Inflation Reduction Act (IRA).

LG Energy Solution announced on the 7th that its operating profit for the first quarter provisionally rose 138.2% year-on-year to 374.7 billion won. During the same period, sales increased by 2.2% to 6.265 trillion won. Compared to the previous quarter, operating profit turned to profit, while sales decreased by 2.9%.

Kim Dong-myung, CEO of LG Energy Solution, is presenting at the regular shareholders' meeting held at LG Twin Tower in Yeouido, Seoul on Oct. 20. /Courtesy of LG Energy Solution
Kim Dong-myung, CEO of LG Energy Solution, is presenting at the regular shareholders' meeting held at LG Twin Tower in Yeouido, Seoul on Oct. 20. /Courtesy of LG Energy Solution

The amount of the advanced manufacturing production tax credit (AMPC) pursuant to the U.S. IRA was 457.7 billion won, an increase of 21% compared to the previous quarter. Excluding the AMPC benefit, operating loss was reduced to 83 billion won from 602.8 billion won in the previous quarter.

The shipment volumes from major clients were more solid than expected, and the effect of the rising exchange rates also positively impacted the performance. In terms of sales, while some manufacturers (OEMs) continued end-of-year inventory adjustments, the energy storage system (ESS) business slightly decreased as it entered the seasonal off-season.