Battery Industry Reverses Q3 Performance... LG Energy Solution and Samsung SDI Achieve Record-Breaking Quarterly Results

LG Energy Solution and Samsung SDI
Record High Sales
Rising Lithium and Nickel Raw Material Prices
Offset Operating Profit Decline
Positive Outlook for Medium and Large Batteries in Q4

[Asia Economy Reporters Donghoon Jeong, Seoyoon Choi] Despite the complex crisis situation, domestic battery companies experienced a rebound in the third quarter of this year. The decline in performance in the second quarter, caused by soaring raw material prices and a contraction in global demand, was reversed in just one quarter.

According to disclosures made on the 26th by LG Energy Solution and Samsung SDI, LG Energy Solution recorded sales of 7.6482 trillion KRW and an operating profit of 521.9 billion KRW, while Samsung SDI posted sales of 5.368 trillion KRW and an operating profit of 565.9 billion KRW. Both companies achieved record-high sales in the third quarter. In particular, they offset the decline in operating profit caused by rising raw material prices such as lithium and nickel due to the Russia-Ukraine war and other factors in the first half of the year. Compared to the previous quarter, LG Energy Solution’s operating profit rose 166.8% to 521.9 billion KRW, and Samsung SDI’s increased by 31.9% to 565.9 billion KRW.

Notably, LG Energy Solution announced through its disclosure that it is raising its annual sales target to 25 trillion KRW this year. This follows an earlier upward revision from 19.2 trillion KRW to 22 trillion KRW during the second quarter earnings announcement. LG Energy Solution’s cumulative operating profit through the third quarter is approximately 970 billion KRW, making it certain to surpass 1 trillion KRW in annual operating profit for the first time.

Last year, LG Energy Solution’s annual sales were 17.9 trillion KRW. If the target is met, it will represent a sales growth of around 7 trillion KRW compared to last year. In the second half of this year, electric vehicle shipments are expected to expand further, and the favorable exchange rate environment due to the pass-through effect of raw material prices and the strong dollar is likely to continue.

Samsung SDI also recorded record-high sales and operating profit, driven by strong performance in its electric vehicle battery business. Samsung SDI explained that the background for its strong results despite rising raw material costs due to the global economic downturn and inflation was the effectiveness of the “quality growth with profitability advantage” strategy emphasized by CEO Yoonho Choi. In July, CEO Choi stressed, “To become a global leader, the three management policies of ‘super-gap technological competitiveness,’ ‘best quality,’ and ‘quality growth with profitability advantage’ have become even more important, and they must be implemented with greater speed.”

Looking at operating results by business division, the energy sector’s sales increased by 76.4% year-on-year to 4.834 trillion KRW, and operating profit rose 140.2% year-on-year to 484.8 billion KRW. Growth in sales centered on high-value-added small batteries and significant improvement in the profitability of medium- and large-sized batteries resulted in an operating profit margin of 10%. Notably, sales of EV batteries, including prismatic and cylindrical types, accounted for more than 50% of total company sales.

For medium- and large-sized batteries, sales increased and profitability improved as premium electric vehicle demand remained steady and sales of high-value-added products such as the P5 (Gen.5) expanded. ESS batteries reflected raw material price increases in their pricing and improved profitability by expanding sales in Europe.

Medium- and large-sized battery sales are expected to increase in the fourth quarter, supported by the traditional peak season effect. Sales of automotive batteries will expand with the launch of new models equipped with the P5 (Gen.5) battery, and efforts to secure orders for next-generation platforms such as the P6 (Gen.6) battery will continue.

This content was produced with the assistance of AI translation services.