Samsung SDI reports 63 percent surge in net profit in 2022, record high

Samsung SDI reported a 63 percent surge in net profit in 2022, hitting a record high in part thanks to solid demand for mid-to-large batteries for electric vehicles (EVs).

Samsung SDI CEO Choi Yoon-ho speaks during a meeting with his employees at the headquarters in Yongin, Gyeonggi, in April. [SAMSUNG SDI]

Samsung SDI reported a 63 percent surge in net profit in 2022, hitting a record high in part thanks to solid demand for mid-to-large batteries for electric vehicles (EVs).

Its net profit came in at an all-time high of 2.04 trillion won ($1.7 billion) last year, up 63.1 percent on year, beating the market consensus of 1.97 trillion won.

Sales jumped 48.5 percent to 20.1 trillion won in line with market expectations, also a record.

Operating profit soared 69.4 percent to a fresh high of 1.8 trillion won.

"Sales of mid-to-large batteries like Gen. 5 constantly increased," Michael Son, senior vice president of the company during a conference call on Monday.

"Profitability also grew for batteries for energy storage systems."

Samsung SDI's electric car batteries [SAMSUNG SDI]

Gen. 5 is Samsung SDI’s nickel-cobalt-aluminum (NCA) battery with 88 percent nickel content. Its main client for Gen. 5 batteries is BMW.

Quarterly net profit rose 60.7 percent to 629.2 billion won in the fourth quarter, while sales jumped 56.3 percent to 5.97 trillion won.

But the electronics materials business saw an 11.9 percent decline in sales, with operating profit sliding 9.5 percent.

Samsung SDI predicted a rosy 2023.

"Our expanded Hungary plant started mass production, and we will increase the supply of our Gen. 5 batteries at a large scale," Sohn added. "We are well prepared for the future as well.

Samsung SDI's pilot plant for solid-state batteries in Suwon, Gyeonggi, is expected to be completed in the first half.

Solid-state batteries are touted as "dream batteries" for their high energy density and safety but have yet to be commercialized by any company in the world.

"We are scheduled to produce sample cells in the second half," Sohn said.

Samsung SDI is also developing its own cylindrical batteries 46 millimeters in diameter. The height of the battery has not been decided yet.

The plant in Cheonan, South Chungcheong, is expected to start production in the first half.

Tesla in 2020 introduced “4680” cylindrical batteries, batteries 46 millimeters in diameter and 80 millimeters in height. They have a higher energy density than existing batteries, reducing battery costs by 50 percent.

Samsung SDI had a 5.9 percent share in the global battery market last year through November, according to SNE Research, compared to LG Energy Solution's 12.3 percent and SK On's 5.9 percent.

LG Energy Solution reported a weaker-than-expected 779.8 billion won in net profit last year, down 16.1 percent on year. SK On has yet to release its earning report for 2022, but is expected to report 224.5 billion won in operating loss.

Samsung SDI shares closed unchanged at 687,000 won on Monday.

BY SARAH CHEA [chea.sarah@joongang.co.kr]