LG Energy Solution lifts 2026 sales target 35-40 percent as ESS demand surges

LG Energy Solution said Tuesday it now expects 2026 revenue to grow 35 to 40 percent from a year earlier, including North American production subsidies, raising a target it had previously put at mid-teens to 20 percent growth and crediting a changed business environment for the revision.

The Korean battery maker reported third-quarter revenue of 9.64 trillion won ($7.19 billion) and operating profit of 756 billion won ($564 million), a margin of 7.8 percent. Sales rose 27.6 percent from the previous quarter's 7.56 trillion won ($5.64 billion) and operating profit jumped 567.3 percent from 113 billion won ($84.5 million).

The company attributed the quarter's improvement to higher energy storage system shipments, increased deliveries of high-voltage mid-nickel electric vehicle pouch cells and continued supply of its 21 and 46-series cylindrical batteries, and cited easing fixed-cost burdens as utilization improved in Europe and capacity at its North American ESS plants stabilized. It secured its first direct behind-the-meter battery storage project with a large technology company and was selected as a partner for Nvidia's "DSX Ready" storage systems, and plans to lift North American ESS production capacity above 50 gigawatt-hours by the end of 2026 and above 70 gigawatt-hours in 2027.

North American production incentives, including the IRA 45X credit, contributed 417 billion won ($311 million) in the quarter. Excluding them, revenue would have been 9.23 trillion won ($6.88 billion) and operating profit 339 billion won ($253 million), a margin of 3.7 percent.

The debt-to-equity ratio rose to 171 percent at the end of September from 157 percent three months earlier, the borrowing ratio to 98 percent from 96 percent and the net debt ratio to 82 percent from 72 percent. Cash and equivalents stood at 4.26 trillion won ($3.18 billion).

The company had spent 3.8 trillion won ($2.83 billion) on capital expenditure in the first nine months, down 40 percent from 8 trillion won ($5.97 billion) a year earlier, putting it on track for its stated goal of a 40 percent reduction for 2026.

It signed a four-year contract for 240,000 tonnes of Canadian lithium concentrate and a 10-year deal for 80,000 tonnes of US lithium carbonate, and has expanded its roster of lithium iron phosphate cathode suppliers to more than four.

The guidance revision was filed as a correction to an earlier future business and management plan disclosure. The company restated its 2026 operating profit margin target at a mid-single-digit percentage.