Tesla supplier L&F’s earnings disappoint; shares down

L&F Co., global electric vehicle leader Tesla Inc.’s battery materials supplier, missed quarterly earnings estimates on sluggish product prices, sending its shares to their lowest level in more than two weeks.

L&F, South Korea’s major cathode manufacturer, said on Thursday its operating profit tumbled 95.1% to 3 billion won ($2.3 million) in the second quarter from a year earlier on a consolidated basis although sales jumped 58.6% to 1.4 trillion won.

The results fell short of analysts’ average profit forecast of 64.7 billion won and sales estimate of 1.6 trillion won.

“The earnings reflected lower selling prices amid the drop in raw materials prices such as lithium and losses due to reporting by the lower of cost or market (LCM) method,” said a company official during an earnings call. The method is used to value inventory by comparing the original cost and the current market price and recording the cost of inventory by whichever is lower.

“Customers also cut shipments, hurting our second-quarter earnings, but we plan to announce long-term contracts soon.”

After the disappointing earnings, L&F’s share price slipped to as low as 229,000 won, its weakest since July 18.

The company affirmed its plan to shift its stocks currently listed on the country’s junior bourse Kosdaq to the main Kospi.

“We will start the process for moving as the shift to the Kospi is very positive,” said L&F Vice President Park Nam Won, adding the company does not have any rights offering plan this year.

ECOPRO REVISES EARNINGS HIGHER

Meanwhile, its rival EcoPro Co. revised up its quarterly profit.

EcoPro, the holding company of cathode maker EcoPro BM Co. and chemicals producer EcoPro HN Co., said its operating profit edged up 0.2% to 170.3 billion won in the April-June period on a consolidated basis with sales up 63.8% to 2 trillion won.

Last month, EcoPro released preliminary earnings for the quarter with an operating profit down 2.1% to 166.4 billion won.

“The profitability is expected to temporarily weaken but it will recover from the fourth quarter,” said a company official.

EcoPro BM said its operating profit rose 11.5% to 114.7 billion won in the second quarter as sales soared 60.6% to 1.9 trillion won.

Write to Mi-Sun Kang at misunny@hankyung.com
 

Jongwoo Cheon edited this article.