LG Energy Solution (KRX:373220) posted a higher third-quarter operating profit, driven by a sharp revenue increase and the estimated impact of a U.S. production tax credit.

Operating profit rose 26% to 756 billion Korean won from a year earlier, while revenue jumped 59% to 9.643 trillion Korean won, according to preliminary results for the three months ended September.

The third-quarter results included the estimated impact of the Advanced Manufacturing Production Credit under Section 45X of the U.S. Inflation Reduction Act.

Excluding the credit, revenue was 9.227 trillion Korean won, while operating profit was 339.1 billion Korean won, with an operating margin of 3.7%.

LG Energy Solution also said it signed a four-year binding offtake agreement with Elevra Lithium for 240,000 dry metric tonnes of spodumene concentrate from the North American Lithium project in Quebec, Canada.

Supply is expected to begin later this year, the statement said.

The agreement will diversify LG Energy Solution's raw-material sourcing beyond lithium carbonate and lithium hydroxide, while providing greater flexibility to adjust production for electric-vehicle and energy-storage-system demand.

The company said local sourcing would also strengthen its North American battery supply chain as demand for energy storage systems grows in the region.