Samsung SDI Q2 Operating Profit 280.2 Billion KRW... 38% Decrease YoY

'Qualitative Growth with Profitability Advantage' Management Policy
Choi Yoon-ho, CEO of Samsung SDI
"The second half remains challenging
A very important opportunity for the future"

Samsung SDI announced on the 30th that it recorded sales of 4.4501 trillion KRW and an operating profit of 280.2 billion KRW in the second quarter of this year.

Sales down 24% and operating profit down 38%... Demand slump that even Samsung could not avoid

According to Samsung SDI, the company's second-quarter sales fell by 1.3905 trillion KRW, or 24%, compared to the same period last year, and decreased by 13% compared to the previous quarter. Operating profit decreased by 170 billion KRW, or 38%, compared to the same period last year, but increased by 12.8 billion KRW (5%) compared to the previous quarter. These results were below the securities market consensus estimates of 5.1 trillion KRW in sales and 332 billion KRW in operating profit.

Sales in the battery division were 3.8729 trillion KRW, down 1.3972 trillion KRW year-on-year and 708.9 billion KRW quarter-on-quarter. Operating profit was 208 billion KRW, down 180.1 billion KRW year-on-year and 6.5 billion KRW quarter-on-quarter. The operating profit margin was 5.4%.

Among medium and large batteries, automotive batteries saw a decline in performance due to decreased sales caused by market demand slowdown. ESS (Energy Storage System) batteries saw increases in both sales and operating profit as sales of power SBB and high-output UPS batteries expanded due to increased demand from data centers driven by the expansion of renewable energy generation and the AI market.

Among small batteries, cylindrical batteries saw a decrease in sales due to customer inventory adjustments, but operating profit increased due to one-time compensation based on long-term supply contracts. Pouch-type batteries experienced a decline in sales due to weakening front-end demand.

Sales in the electronic materials division were 577.2 billion KRW, up 6.7 billion KRW year-on-year and 28.1 billion KRW quarter-on-quarter. Operating profit was 72.2 billion KRW, up 10.1 billion KRW year-on-year and 19.3 billion KRW quarter-on-quarter. The operating profit margin was 12.5%.

Polarizing film sales and operating profit increased due to expanded sales of high-value large-area TV products. Semiconductor materials improved performance due to expanded sales to major customers, and OLED materials minimized sales decline despite reduced demand by entering new IT products.

"The second half will also be challenging"... Seeking breakthroughs such as additional long-term ESS supply negotiations

Samsung SDI plans to maintain its management policy of "qualitative growth with profitability superiority" despite difficult business conditions such as the electric vehicle chasm in the first half of this year.

Samsung SDI is preparing for the commercialization of all-solid-state batteries by expanding sample supply to five customers. To respond to demand in the volume market (mass consumer market) and entry-level electric vehicle market, it is establishing an LFP (Lithium Iron Phosphate) development line and accelerating preparations for mass production in 2026. In particular, the 46-pi cylindrical battery plans to begin mass production in early 2025, about one year earlier than planned, due to securing new customers for M-mobility.

Additionally, the company recently secured a large-scale power ESS project order from the largest power company in the United States and is in additional negotiations for long-term supply volumes with major customers based on SBB.

The company stated, "The full-scale recovery in the second half of this year may be delayed compared to expectations, but the long-term high growth of the battery industry is expected to remain unchanged. Among medium and large batteries, automotive batteries are showing weak front-end demand, but gradual demand recovery is expected from the fourth quarter." Samsung SDI plans to improve performance and prepare for future growth by expanding supply of P6 batteries in North America and early mass production of SPE (StarPlus Energy).

ESS batteries are expected to continue growing in demand centered on power and high-output UPS (Uninterruptible Power Supply) in the second half, leading to continued sales expansion. Samsung SDI plans to continuously improve profitability along with sales growth by securing additional new orders from major customers in North America.

Samsung SDI will steadily prepare for future sustainable growth along with performance improvement in the second half. To this end, it plans to focus on maximizing sales to overcome demand slowdown, innovating cost structures to improve profitability, and securing future technologies to lead the market.

Yoonho Choi, CEO of Samsung SDI, said, "Although the second half is expected to be challenging, how the company responds could become a very important opportunity for the future. We will secure differentiated competitiveness to seize new opportunities when the market turns around."

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