Lotte Energy Materials (020150) Q2 2026 earnings summary

Executive summary

• Q2 2026 saw revenue growth driven by strong sales of high-output small-battery products, ESS in North America, and circuit foil.

• Operating profit improved year-over-year due to higher sales volume and increased utilization at the Malaysia plant, though profitability improvement was less pronounced quarter-over-quarter when excluding a prior one-off gain.

• Net income swung to a loss in Q2 2026 after a brief profit in Q1, reflecting ongoing margin pressures.

• The company operates in two main segments: materials (notably Elecfoil for batteries and electronics) and construction (curtain wall and related projects), with 15 consolidated subsidiaries as of June 2026.

• Major business is Elecfoil, a key material for EV batteries, AI accelerators, and IT products, with global expansion in Malaysia and Spain.

Financial highlights

• Q2 2026 revenue reached KRW 194 bn, up 21.5% sequentially from Q1 2026 and up 5.2% year-over-year.

• H1 2026 consolidated revenue: KRW 354.0 billion, down from KRW 677.5 billion in 2025 and KRW 902.3 billion in 2024.

• Operating loss for H1 2026: KRW -21.9 billion (2025: -KRW 145.2 billion; 2024: -KRW 64.4 billion).

• Net income was a loss of KRW 19 bn in Q2 2026, reversing a profit of KRW 4 bn in Q1 2026; net loss attributable to owners for H1 2026: KRW -18.9 billion.

• Cash and cash equivalents at June 2026: KRW 125.5 billion; total assets: KRW 2.46 trillion; total equity: KRW 1.87 trillion.

Outlook and guidance

• H2 outlook is positive, with full production and sales expected at both domestic and Malaysia plants due to supply bottlenecks and surging demand for copper foil.

• Ongoing large-scale capacity expansions in Malaysia (up to 150,000 tons by 2028) and Spain (targeting 100,000 tons, with 30,000 tons by 2027).

• Focus on high-end Elecfoil, next-gen battery materials (solid electrolytes, LFP cathodes), and AI-related copper foil.

• Client purchasing strategies are shifting to prioritize supply volume amid ongoing supply constraints.