█ Recorded preliminary first-quarter revenue of KRW 241.7 billion and operating profit of KRW 4.3 billion... Recorded record revenue and highest sales volume in a quarter

█ Remained the only company in the copper foil industry in the black despite declining growth expectations for electric vehicles and secondary batteries

█ CEO Yeon-seop Kim “expects solid sales growth in the second quarter and expansion of high-end copper foil orders in the second half of the year”...'We will become a key supplier contributing to our customers' growth by leading the way in technology competitiveness and process innovation.'

▲ LOTTE ENERGY MATERIALS Elecfoil Product

LOTTE Energy Materials (CEO Yeon-seop Kim) has posted record quarterly sales and the largest sales volume in its history, thanks to diversified customers and increased sales to North America.

LOTTE Energy Materials announced today that its preliminary results for the first quarter of 2024 (consolidated basis) were KRW 241.7 billion in sales and KRW 4.3 billion in operating profit. Sales increased 48% compared to the same period last year (KRW 163.6 billion), and operating profit (KRW 6.1 billion) decreased 29%, but the company remained the only company in the copper foil industry in the black.

Compared to last quarter's sales (KRW 229.5 billion), the company's sales grew 5%, and operating income (KRW 1.1 billion) surged 282%. Although the chasm in the electric vehicle and secondary battery markets reduced growth expectations for all industries, diversified customers and increased sales to North America contributed to the increase in sales.

Overall sales in the first quarter increased 47% compared to the same period last year, with sales to North America up 380% year-on-year and sales to Europe up 99%. Going forward, we plan to increase our market share in copper foil by expanding global supply, focusing on North America and Europe.

Corporate fundamentals are also stable. With a debt-to-equity ratio of 27%, the company maintains industry-leading financial stability, with cash and cash equivalents of KRW 743.3 billion, and is well positioned to fund additional Capex.

Overseas operations and preparations are also on track. The 5th and 6th plants of the Malaysian subsidiary, which have the world's highest cost competitiveness for copper foil, are currently being commissioned and are expected to help secure profitability once they enter mass production in the second half of the year. In addition, the Smart Factory project in Spain is progressing smoothly with the site suspension work for full-scale construction, and the new plant in North America is in the final stages of site selection and incentive negotiations with the state government.

We have also completed the establishment of a high-end hybrid copper foil mass production platform that simultaneously satisfies ultra-thin, high-strength, and high-stretch, which is expected to be used in batteries with improved energy density in the future. Completed R&D for customized process and form factor products for customers, including 46-pi cylindrical batteries, and is expanding approvals from multiple customers.

We are also developing and supplying 'ultra-low light' copper foil for the fourth generation of CCL, which is the next generation of high-value copper foil for AI semiconductors, autonomous driving, and aerospace, to global customers. In addition, we are conducting customer testing and approval work to supply 'ultra-thin' products for semiconductor packaging and nickel-plated copper foil for solid-state electrolytic batteries.

Existing next-generation battery material investments are also on track. The sulfide-based solid-state electrolyte pilot line broke ground in January and is more than 50 percent advanced. In addition, we plan to build a LFP semi-manufacturing line utilizing our existing LMO facility in the third quarter.

'With solid sales growth in the second quarter, we expect the pace of sales growth to accelerate further in the second half of the year, when volumes are concentrated, due to the expansion of orders for high-end copper foil,' said Yeon-seop Kim, CEO of LOTTE Energy Materials. 'We will continue to be a key supplier contributing to the growth of our customers with our ultra-leading technology competitiveness and process innovation.'