Samsung SDI logs highest quarterly OP in Q3, up 26.5% on qtr and 40% on yr

[Photo provided by Samsung SDI Co.]

(Updated with conference call comments)

South Korea’s battery major Samsung SDI Co. kept up hot earning streak, refreshing quarterly best in the third quarter on strong sales of high value-added products despite stagnated vehicle power due to chip shortage.

The battery producer announced in a regulatory filing on Tuesday that its operating profit on a consolidated basis from July to September reached 373.5 billion won ($317.6 million), up 26.5 percent from the previous quarter and 39.7 percent from last year. Sales grew 3.2 percent on quarter and 11.4 percent on year to 3.44 trillion won, reaching a fresh quarterly high in just three months.

Net profit came at 420.4 billion won, up 45.8 percent on quarter and 74.7 percent on year.

Samsung SDI shares finished up 1.11 percent at 731,000 won on Tuesday.

Its battery business raked in 201.8 billion won in operating profit and 2.74 trillion won in sales in the third quarter. The electric vehicle (EV) battery business maintained sound performance since it delivered its first profit in the second quarter, as the increase in sales of high value-added products offset the impact of supply shortage of automobile chips.

The energy storage system (ESS) sales, however, declined due to the delayed supply for major projects.

The small-sized battery business showed improved sales and profitability in the July-Sept period. Cylindrical battery sales increased thanks to high demand for EVs and e-bikes, and pouch-type batteries also sold well on robust sales of smartphones and wearable devices.

The company’s electronic material business recorded 171.1 billion won in operating profit and 698.9 billion won in sales.

Samsung SDI expects it could maintain the strong performance in the fourth quarter.

“We will expand new EV battery production and keep close cooperation with clients to rapidly respond to market changes to maintain profits in the EV battery business by the end of the year,” said Samsung SDI chief financial officer Kim Jong-sung during a conference call.

“The global chip supply disruptions affecting the auto industry will continue in 2022 but the impact would be limited as carmakers prioritize EVs,” he added.

Vehicle battery sales would rise thanks to the supply expansion of Gen.5 batteries, the company said. It began mass-producing the Gen.5 batteries in the third quarter. Sales of small-sized cylindrical batteries and pouch batteries are also projected to grow on the back of the robust global EV and smartphone markets.

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