LS Electric, Q2 Record Performance... Operating Profit Up 74.6%
Sales Exceed 1 Trillion Won, Operating Profit Surpasses 100 Billion Won for the First Time
LS Electric recorded its highest quarterly performance due to favorable conditions in the power infrastructure business.
On the 25th, LS Electric announced that its consolidated operating profit for the second quarter was preliminarily estimated at 104.9 billion KRW, a 74.6% increase compared to the same period last year. Sales reached 1.2018 trillion KRW, up 36.8%. Both sales and operating profit marked record highs on a quarterly basis. Net profit increased by 166.0% to 73 billion KRW.
The power infrastructure business of LS Electric experienced a boom as investments in production facilities for batteries, semiconductors, and electric vehicles increased in global markets such as North America. In particular, demand for power infrastructure surged as related companies increased local facility investments to receive tax credits under the Inflation Reduction Act (IRA) implemented in the U.S. this year. This is the reason why sales and operating profit exceeded 1 trillion KRW and 100 billion KRW respectively for the first time in the second quarter.
Increased demand for power equipment in Southeast Asia and the Middle East also contributed to the performance growth. Although the factory automation business saw a reduced share in China due to U.S.-China tensions, sales slightly increased year-on-year as orders for automobile and semiconductor factories grew. The renewable energy business also contributed to the performance expansion with sales from large-scale projects such as the Yeongju Energy Storage System (ESS) and the Bigeumdo solar power plant.
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Kim Jisan, a researcher at Kiwoom Securities, evaluated, "Power infrastructure based on order backlog is driving the surprise performance." He also predicted, "(LS Electric) has decided to establish a distribution system production base in Texas, USA," adding, "It will be able to respond more actively to U.S. facility investment demand in the IRA and reshoring environment."
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