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    A051910   KR7051910008

LG CHEM, LTD.

(A051910)
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LG Chem Q3 results miss estimates, hit by GM Bolt recall cost

10/25/2021 | 02:39am EST
FILE PHOTO: FILE PHOTO: FILE PHOTO: The logo of LG Chem is seen at its office building in Seoul

SEOUL, Oct 25 (Reuters) - South Korea's LG Chem Ltd posted a 20% fall in quarterly profit on Monday, hurt by a one-off expense associated with the recall of General Motors' Bolt electric vehicles.

It reported an operating profit of 727 billion won ($617.55 million) for the July-September period, versus 904 billion won a year earlier and an average analyst forecast of 893 billion won compiled by Refinitiv SmartEstimate.

Earlier this month, LG Chem, which owns electric battery maker LG Energy Solution (LGES), said it would take a charge nL1N2R8085 of 620 billion won in its third quarter results in connection with the GM Bolt recall https://www.reuters.com/business/autos-transportation/chevrolet-bolt-fires-date-back-early-2019-gm-says-2021-09-13 due to the risk of fire caused by rare battery defects.

Revenue rose 41% to 10.6 trillion won, LG Chem said in a regulatory filing.

LG and GM settled a $2 billion cost deal on the Bolt recall earlier this month, paving the way for LG's battery unit to resume work on its suspended initial public offering.

"We expect that it is less likely that the company would face repetitive large-scale recalls related to battery safety issues in the future," LGES Vice President Chang Seung-se said in a call with analysts, citing the company's improved process to detect defective batteries.

LGES is hoping to a ride a boom in soaring battery demand, as global automakers are investing billions of dollars to accelerate a transition to low-emission mobility and prepare for a progressive phase-out of internal combustion engines.

The company, which also supplies Tesla Inc and Hyundai Motor Co, struck a deal last week with Stellantis NV to jointly produce EV batteries.

Before the third -quarter earnings results announcement, LGES named LG Corp Vice Chairman Kwon Young Soo as its new chief executive officer.

Asked about LG Chem's plans to develop cheaper lithium-iron-phosphate (LFP) nL4N2PU1IWbatteries for electric vehicles, the company said it plans to supply LFP batteries for energy storage systems (ESS) first.

Tesla said it plans to adopt LFP batteries in its fleet of standard-range vehicles globally.

LGES has been focusing on developing nickel-cobalt-manganese (NCM) batteries, which are more expensive but offer longer range.

Japan's Panasonic said on Monday it had no nL1N2RL0CKplans to make LFP batteries for electric vehicles.

Shares of LG Chem closed up 0.4%, versus the KOSPI's 0.5% rise. ($1 = 1,177.2300 won)

(Reporting by Heekyong Yang and Joyce Lee; Editing by Miyoung Kim, Sam Holmes and Emelia Sithole-Matarise)


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
HYUNDAI MOTOR COMPANY 0.75% 202000 End-of-day quote.-3.35%
LG CHEM, LTD. 6.58% 696000 End-of-day quote.13.17%
LG CORP. 1.41% 79200 End-of-day quote.-2.10%
LG ELECTRONICS INC. 2.19% 140000 End-of-day quote.1.45%
STELLANTIS N.V. -1.03% 18.794 Delayed Quote.13.81%
TESLA, INC. 0.06% 996.27 Delayed Quote.-5.73%
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Analyst Recommendations on LG CHEM, LTD.
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Financials
Sales 2021 43 083 B 36,1 B 36,1 B
Net income 2021 3 952 B 3,32 B 3,32 B
Net Debt 2021 6 727 B 5,64 B 5,64 B
P/E ratio 2021 13,2x
Yield 2021 1,63%
Capitalization 51 362 B 43 205 M 43 093 M
EV / Sales 2021 1,35x
EV / Sales 2022 1,15x
Nbr of Employees -
Free-Float -
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Technical analysis trends LG CHEM, LTD.
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Mean consensus BUY
Number of Analysts 25
Last Close Price 696 000,00 KRW
Average target price 1 033 560,00 KRW
Spread / Average Target 48,5%
EPS Revisions
Managers and Directors
Hak Cheol Shin Vice Chairman & Chief Executive Officer
Okdong Son President
Dong-Seok Cha Chief Financial Officer & Director
Jin-Soo Park Vice Chairman
Ki-Soo No CTO & President-Executive Board
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