Samsung SDI Q4 OP second-best, annual record sales, eyes 80% jump in EV battery

Samsung SDI Co., battery making unit under South Korea’s top conglomerate Samsung Group, said on Thursday that it swung to a net profit of 341.9 billion won in the fourth quarter record sales and anticipates stronger year to come with estimated 80 percent jump in EV power.

In a regulatory filing on Thursday, Samsung SDI reported a net profit of 341.9 billion won in the October-December period from a net loss of 33.1 billion won in the same period a year ago. Against the previous quarter, its bottom line gained 42.03 percent.

The company’s operating profit reached 246.2 billion won in the fourth quarter, down 7.91 percent on quarter but up 1,123.47 percent on year.

Revenue jumped 5.32 percent on quarter and 15.26 percent on year to a record 3.25 trillion won.

The company said that sales of small-size batteries fell in the fourth quarter and it had to reflect allowances to cover fire that occurred in an electric vehicle’s lithium-ion battery. Sales of mid- to large-size batteries, however, such as of energy storage systems, rose.

Shares of Samsung SDI closed down 2.8 percent at 767,000 won on Thursday.

For the full year, Samsung SDI raised 671.3 billion won in operating income, up 45.26 percent from a year ago, on record revenue of 11.29 trillion won, rising 11.9 percent from the previous year. It is the first time for its annual revenue to exceed 11 trillion won.

The company raised the second-largest operating profit in 2020 after 2011 when it announced to spin off its display business and focus on batteries. Samsung SDI raised record operating profit of 715 billion won in 2018.

By business, Samsung SDI’s battery division raised 117 billion won in operating profit in the fourth quarter, shifting from a loss a year ago, on sales of 2.6 trillion won, up 18.9 percent over the same period.

The electronic material division saw its operating profit jump 3.2 percent on year to 129.2 billion won on sales of 622.2 billion won, up 1.9 percent.

The company said that revenue growth was mainly driven by green policies such as a rise in subsidies for electric vehicles in Europe in the second half of last year. Sales were also affected by big energy storage system projects in the United States.

Sales of polarized polarizing film and semiconducting materials fell due to seasonal factors and inventory adjustment by major customers but supply of OLED materials increased on the launch of new flagship smartphone.

Samsung SDI projected sales of vehicle batteries to fall in the first quarter due to off-peak season but those of ESS to increase in the U.S.

This year, Samsung SDI expected growth in vehicle battery, ESS, small-size fuel cell, and semiconductor OLED materials markets. It projected vehicle battery market to grow 80 percent from the previous year under green policies in Europe, the U.S., and China. The ESS market is also expected to grow 57 percent on year and small-size battery market 16 percent.

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