EcoPro's Sales Reach 7.2 Trillion Last Year... Operating Profit 295.2 Billion Won, Down 52% Year-on-Year

Q4 Operating Loss of 122.4 Billion KRW
Profitability Declines Due to Falling Mineral Prices and Weak Front-End Demand

EcoPro announced on the 7th that its consolidated sales last year reached 7.259 trillion KRW, a 29% increase from the previous year (5.6397 trillion KRW), but operating profit decreased by 52% to 295.2 billion KRW from 613.2 billion KRW the year before.

EcoPro explained that in the fourth quarter of last year, it recorded sales of 1.2736 trillion KRW and an operating loss of 122.4 billion KRW, due to a sharper-than-expected decline in mineral prices and weakening demand in the upstream market.

Due to the sharp drop in metal prices, EcoPro recorded an inventory asset valuation loss of 181.3 billion KRW in the fourth quarter, but it expects the downward trend in metal prices to slow during 2024, anticipating an improvement in business performance in the first quarter of this year.

By business unit, EcoPro BM, which produces cathode materials, recorded sales of 6.9009 trillion KRW and operating profit of 153.2 billion KRW last year. Sales increased by 29% compared to the previous year, but operating profit decreased by 60%. In the fourth quarter, sales were 1.1804 trillion KRW, down 35% from the previous quarter, and operating profit posted a loss.

EcoPro Materials, which mass-produces precursors, achieved sales of 952.5 billion KRW and operating profit of 8.8 billion KRW last year. Sales increased by 43% compared to the previous year, but operating profit decreased by 77%. In the fourth quarter, sales were 188.4 billion KRW, down 22% from the previous quarter, while operating profit turned positive.

EcoPro HN, the only domestic eco-friendly total solution company, recorded sales of 228.9 billion KRW and operating profit of 41.8 billion KRW last year. Both sales and operating profit grew by 4.9% and 0.9%, respectively, compared to the previous year. In the fourth quarter, sales were 47.6 billion KRW, down 27% from the previous quarter, and operating profit was 7.2 billion KRW, down 37% from the previous quarter.

EcoPro explained that despite the record-high sales, profitability declined due to the continued drop in mineral prices and sluggish demand for electric vehicles since the second half of last year. It is also interpreted that the worsening of the upstream industry (semiconductors) affected the performance of EcoPro HN, which operates in the environmental business sector.

EcoPro plans to pursue sales growth and profitability improvement this year by diversifying its customer base and supply chain. It aims to expand its high-nickel portfolio and secure new customers with mid-nickel products.

Song Hojun, CEO of EcoPro, said at a recent meeting with the family company presidents regarding the performance downturn, "We did our best to defend profits through emergency management, but we regret to report a significant loss in the fourth quarter to our employees and shareholders. The decline in mineral prices was steeper than we predicted, and the electric vehicle market downturn worsened more than expected." He added, "Let all EcoPro members work together to overcome this difficult period through customer expansion and new product development."

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