Lotte Energy Materials (A020150) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw the lowest quarterly sales since the EV market gained traction, driven by clients adjusting battery inventories that began in H2 2024.

• Production was scaled back to reduce inventory, resulting in lower capacity utilization and continued operating losses.

Financial highlights

• Revenue for Q1 2025 was KRW 158 bn, down 34.6% year-over-year and 15.2% sequentially from Q4 2024.

• Operating loss widened to KRW -46 bn in Q1 2025, with an operating margin of -29.1%.

• EBITDA was negative at KRW -23 bn, and net loss reached KRW -55 bn.

• Gross profit margin dropped to 1.3% in Q1 2025 from 9.2% in Q1 2024.

Outlook and guidance

• Inventory adjustments are expected to conclude in Q2 2025, with profitability improving as capacity utilization recovers.

• H2 2025 is projected to see sales and profitability growth as client inventory depletion drives higher capacity utilization, despite U.S. tariff policy uncertainties.

• Profitability is expected to steadily enhance from Q2 2025 due to rising sales and a rebound in capacity utilization.