LS ELECTRIC (010120) Q2 2024 earnings summary

Executive summary

• Achieved record quarterly operating profit in 2Q 2024, driven by strong electric business performance in the U.S. and robust overseas expansion.

• The company operates in power equipment, automation, green energy, and metal businesses, with a global presence and a diversified product portfolio.

• Major business segments include power (88.7% of H1 sales), automation (13.9%), metals (13.8%), and IT (2.4%).

• Recent strategic moves include expansion in EV relay, renewable energy, and international markets.

• Net income declined due to higher corporate tax expenses despite improved pre-tax profit.

Financial highlights

• 2Q 2024 sales: KRW 1,132 bn (up 6% YoY, up 9% QoQ); operating profit: KRW 110 bn (up 4% YoY, up 17% QoQ); EBITDA: KRW 120 bn (up 5% YoY, up 5% QoQ).

• H1 2024 consolidated revenue: ₩2,171,076 million; operating profit: ₩203,368 million; net income: ₩142,482 million.

• Net income: KRW 65 bn (down 11.5% YoY, down 18.9% QoQ) in 2Q 2024 due to increased corporate tax.

• Gross margin improved to 21.6% in 2Q 2024 from 18.0% in 2Q 2023; H1 2024 gross profit at ₩458,448 million.

• Basic EPS for H1 2024: ₩4,842.

Outlook and guidance

• Overseas sales expansion, especially in North America, remains a key growth driver.

• The company targets continued growth in EV relay and renewable energy, leveraging global demand for electrification and green infrastructure.

• Order backlog increased 22% from end FY23 to 2Q 2024, supporting future revenue.

• Plans to maintain a dividend payout ratio of at least 40% of standalone net income through 2024.