L&F Co (066970) Q2 2024 earnings summary

Executive summary

• Revenue for 2Q 2024 was 554,830M KRW, down 12.7% QoQ and 59.4% YoY, driven by a 15% drop in ASP and weak EV/ESS demand.

• Operating loss narrowed to 84,194M KRW from 203,850M KRW in 1Q 2024, aided by high-cost inventory depletion.

• L & F Co., Ltd. reported a significant net loss for H1 2024, reflecting challenging market conditions and increased financial expenses.

• The company manufactures and sells cathode active materials for secondary batteries, with a single reportable segment.

• Cash flow management remains a focus, with positive operating cash flow expected to continue into 3Q.

Financial highlights

• Sales for H1 2024 were W1,190.5 billion, down from W2,731.1 billion YoY.

• Net loss for 2Q 2024 was 74,417M KRW, improving from 111,693M KRW loss in 1Q 2024; H1 net loss was W185.3 billion.

• Gross profit for 2Q 2024 was -61,135M KRW, with a gross margin of -11%; H1 gross profit was W24.2 billion.

• Ending cash balance stood at 392,528M KRW, up from 241,300M KRW at 2023 year-end.

• Total assets as of June 30, 2024, were W3,171.6 billion, down 7% QoQ.

Outlook and guidance

• Management expects continued positive operating cash flow in 3Q 2024, with ongoing inventory and cost controls.

• The company is reviewing new accounting standards effective from 2025 and monitoring market and regulatory changes.

• Financial metrics are expected to improve in the second half as inventory and raw material management continue.