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
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
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
($1 = 1,177.2300 won)
(Reporting by Heekyong Yang and Joyce Lee; Editing by Miyoung
Kim, Sam Holmes and Emelia Sithole-Matarise)