L&F Co (066970) Q2 2024 earnings summary

Executive summary

• Revenue for 2Q 2024 was 554,830M KRW, down 12.7% sequentially and 59.4% year-over-year, driven by a 15% drop in average selling price and weak demand in both EV and ESS segments.

• Revenue for H1 2024 was ₩1,190.5 billion, a sharp decline from ₩2,731.1 billion in H1 2023, with an operating loss of ₩288.0 billion compared to an operating profit of ₩43.4 billion a year earlier.

• Operating loss narrowed to 84,194M KRW from 203,850M KRW in 1Q 2024, as high-cost inventory depletion reduced losses despite lower shipments.

• Net loss attributable to controlling interests was ₩185.3 billion, reversing from a net profit of ₩49.6 billion in H1 2023.

• The company operates a single business segment focused on cathode active materials for secondary batteries, with 100% of sales from this segment.

Financial highlights

• Gross profit for 2Q 2024 was -61,135M KRW, with a gross margin of -11%, reflecting continued high costs.

• Net loss for 2Q 2024 was 74,417M KRW, an improvement from 111,693M KRW loss in 1Q 2024.

• Cash and cash equivalents at period-end were ₩392.5 billion, up from ₩241.3 billion at the end of 2023.

• Total assets decreased to ₩3,171.6 billion from ₩3,351.4 billion at 2023 year-end.

• R&D expenses for H1 2024 were ₩18.5 billion, 1.56% of sales.

Outlook and guidance

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

• The company is expanding production capacity for EV cathode materials, with ongoing investments and plans to respond flexibly to market and customer trends.