LG Energy Solution (LGES) has announced its record-high annual consolidated revenue and operating profit for 2022. During a conference call, the company also revealed its 2023 revenue target to increase the annual revenue by 25 to 30 percent from the previous year, through the expansion and stable operation of global manufacturing facilities, as well as increasing sales in the North American region.
For the full year, LGES reported KRW 25.6 trillion in consolidated revenue and KRW 1.2 trillion in operating profit, marking an on-year increase of 43.4 percent and 57.9 percent respectively. The increase in revenue was attributed to an increase in battery shipment across all product line-ups in response to the increased demands for electric vehicles (EVs) and power grid energy storage systems (ESS). Additionally, the company expanded the reflection of major cost increase into the average selling price (ASP), which also played a role in achieving a notable performance last year.
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LGES also reported its fourth quarter financial results of KRW 8.54 trillion in consolidated revenue and KRW 237.4 billion in operating profit. The fourth quarter revenue of 2022, marking a record-high, increased by 12 percent from the previous quarter (KRW 7.65 trillion) and by 92 percent year-on-year (KRW 4.44 trillion), driven by increased EV battery sales for major customers, production ramp-up at the GM JV (Ultium Cells) plant in Ohio, and volume growth in ESS for power grids.
In addition to announcing its revenue target for 2023, LGES also plans to increase its capex by more than 50 percent from the previous year’s KRW 6.3 trillion. The company plans to expand its global production capacity to 300GWh by the end of this year and will proactively increase the production capacities of its manufacturing facilities in North America, Europe, and Asia. The company’s order backlog has recorded KRW 385 trillion at the end of last year.
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LGES also forecasted that this year’s global battery market demand will reach 890 GWh, a 33 percent increase from the previous year (670GWh). To proactively respond to the increase in the global battery demand, LGES will concentrate on four major initiatives: 1) promoting product competitiveness, 2) materializing smart factories, 3) establishing supply chain management system, and 4) securing future readiness through developing next-generation battery technologies and new business areas.
