K-Battery Trio Posts Strong Q2 Results Amid Electric Vehicle Boom (Comprehensive)

Domestic battery makers continued their strong performance in the second quarter of this year, driven by robust electric vehicle sales centered in North America.

LG Energy Solution announced on the 27th that it recorded consolidated sales of 8.7735 trillion KRW and an operating profit of 460.6 billion KRW in the second quarter of this year. Compared to the same period last year, sales increased by 73.0% and operating profit rose by 135.5%. Compared to the previous quarter, sales increased by 0.3%, while operating profit and net income decreased by 27.3% and 17.2%, respectively. The second-quarter results included an expected tax credit of 110.9 billion KRW under the Advanced Manufacturing Production Credit (AMPC) provision of the U.S. Inflation Reduction Act, which was included in operating profit.

The operating profit for the second quarter decreased by 151 billion KRW from the preliminary results announced earlier this month (611.6 billion KRW). This was due to a 151 billion KRW burden from material costs and cost increases incurred during the recall process of General Motors (GM)'s electric vehicle 'Bolt EV.' LG Energy Solution explained, "This is because, according to an agreement with the customer, the increase in material costs during the GM recall process was additionally reflected as a one-time provision."

Lee Chang-sil, Vice President and CFO of LG Energy Solution, stated, "Operating profit slowed compared to the previous quarter due to temporary manufacturing cost increases caused by timing differences in raw material price reflection and the provision for GM recall costs," but added, "Excluding one-time costs, operating profit margin has significantly improved compared to the same period last year through continuous productivity improvements and cost efficiency, maintaining a stable trend."

Samsung SDI posted sales of 5.8406 trillion KRW and an operating profit of 450.2 billion KRW in the second quarter of this year. This marks the highest sales and operating profit for any second quarter and the fourth consecutive quarter with sales exceeding 5 trillion KRW. Compared to the same period last year, sales increased by 23.2% and operating profit by 4.9%. The operating profit margin was 7.7%.

By business division, battery sales increased by 29.4% year-on-year to 5.2701 trillion KRW, and operating profit rose by 58.5% to 388.1 billion KRW. Among medium and large batteries, automotive batteries saw increased sales and profits due to expanded sales of customer premium vehicles equipped with P5 batteries. ESS (Energy Storage System) batteries increased sales mainly for power and UPS applications, and small cylindrical batteries saw increased sales centered on high-output products. Pouch-type batteries experienced a slight decline in sales due to weakened demand for IT products. The electronic materials division saw sales (570.5 billion KRW) and operating profit (62.1 billion KRW) decrease by 14.7% and 66.3%, respectively, due to continued weakening of IT demand.

SK On, the battery subsidiary of SK Innovation, is expected to reduce its deficit to one-third compared to the previous year. The average forecast for SK On's second-quarter performance from seven securities firms this month is sales of 3.5196 trillion KRW and an operating loss of 111.4 billion KRW. Sales increased by 173.3% compared to a year ago, and the operating loss significantly decreased from the 300 billion KRW range for two consecutive quarters.

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