LS affiliates benefit from expanding investment in AI data centers and power grids.
Growing exports of switchgear, transformers and power cables drive earnings growth.
Expansion of subsea cable operations and greater construction efficiency improve profitability.
LS ELECTRIC posts record quarterly results
LS Group's power equipment and cable affiliates reported a succession of record results in the third quarter this year. North American power grid investment and expanding artificial intelligence data centers increased demand for power equipment and cables, while overseas subsea cable operations and construction efficiency also contributed to improved profitability.
According to industry sources on October 22, LS ELECTRIC achieved record quarterly consolidated revenue of 1.8778 trillion won and operating profit of 233.5 billion won in the third quarter. The figures rose 54.4% and 131.7% year on year, respectively.
This marked 100 consecutive quarters of operating profit since the fourth quarter of 2001. Growing demand for high-value power equipment driven by expanding AI data center and power grid investment supported the results. Sales of its main products, switchgear and extra-high-voltage transformers, increased 120% and 106%, respectively, while power distribution equipment sales rose 32%.
Growth was also evident in North America. Third-quarter revenue in the region reached a record of approximately 500 billion won, up 25% from the previous quarter. LS ELECTRIC is expanding investment in production facilities in Utah and Texas to meet growing local demand for power infrastructure. Its order backlog stood at approximately 7 trillion won at the end of the third quarter.
Cable and bus duct exports support growth
Gaon Cable and LS Eco Energy also both posted record results, supported by expanding exports of power cables and bus ducts. Both companies' cumulative revenue and operating profit through the third quarter exceeded their full-year results for last year.
Gaon Cable reported consolidated third-quarter revenue of 986.5 billion won and operating profit of 52 billion won, increases of 51.9% and 99.1% year on year, respectively. Cumulative revenue through the third quarter reached 2.6194 trillion won and operating profit totaled 116 billion won, both exceeding last year's full-year results.
Increased exports of distribution cables, driven by expanding US AI data center and power grid investment, led the results. US manufacturing subsidiary LSCUS also expanded its business by working with LS Cable & System to supply bus ducts to data centers operated by major local technology companies.
LS Eco Energy also improved its results on strong exports of power cables and bus ducts. Third-quarter revenue reached 351.5 billion won and operating profit was 22.2 billion won, up 51.0% and 50.2% year on year, respectively. Cumulative revenue and operating profit through the third quarter totaled 987.3 billion won and 67.5 billion won, respectively.
Power cable exports to Europe and North America increased, while demand for bus ducts also grew in Asia. In particular, bus duct revenue rose to two to three times its year-earlier level, supported by expanding data center investment in Malaysia and Indonesia. LS Eco Energy plans to establish high-capacity bus duct production facilities in Vietnam and begin mass production in the second half of 2027.
Subsea cable work improves profitability
LS Marine Solution's profitability improved substantially despite a modest decline in revenue. Third-quarter revenue fell 4.3% year on year to 73.6 billion won, but operating profit more than tripled to 6.9 billion won. Cumulative operating profit through the third quarter reached 17.2 billion won, a record for the period.
Subsea cable burial work for Taiwan Power Company's offshore wind farms and subsea telecommunications cable installation projects in the Asia-Pacific region contributed to improved profitability. Subsidiary LS Buildwin also improved construction efficiency on subsea and underground cable projects in Asia and the Middle East.
The revenue decline partly reflected the unavailability of the subsea cable-laying vessel GL2030 for project deployment because of capacity expansion work. GL2030 is scheduled to begin full operations with a Malaysian project in October. LS Marine Solution's order backlog stands at approximately 820 billion won, about 3.4 times last year's annual revenue.
LS Group's power equipment and cable affiliates plan to expand North American production facilities, invest in power equipment for data centers and expand offshore wind operations. Whether growth continues is expected to depend on the start of operations at new facilities, progress on overseas projects and the pace at which secured orders are recognized as revenue.
“Achieving 100 consecutive profitable quarters is a meaningful record that combines a solid business portfolio spanning medium- and low-voltage distribution to extra-high-voltage transmission, sustained investment in new businesses and expansion in global markets,” an LS ELECTRIC representative said. “With orders generated by the AI-driven power infrastructure investment cycle now expanding in earnest on the basis of stable earnings, we will enter a period of sustained high growth.”
Original Korean article: Asia Times
English brief by Korea Wind Intelligence, koreawindintel.com
