Samsung SDI breaks consensus with 464.5 billion won net in first quarter

Samsung SDI reported a consensus-breaking net profit of 464.5 billion won ($347 million) in the first quarter in part due to solid demand for mid-to-large batteries for electric vehicles.

Samsung SDI CEO Choi Yoon-ho speaks during the company's annual general meeting on March 15 in southern Seoul. [SAMSUNG SDI]

Samsung SDI reported a consensus-breaking net profit of 464.5 billion won ($347 million) in the first quarter in part due to solid demand for mid-to-large batteries for electric vehicles.

On year, the net is up by 28.1 percent, beating the market expectation of 409.4 billion won compiled by FnGuide.

Operating profit rose 16.5 percent to 375.4 billion won, falling short of analyst expectations of 383.1 billion won.

Sales jumped 32.2 percent to 5.35 trillion won.

"The operating profit and sales figures are a record high performance for any first quarter result," Samsung SDI said in a release. "Sales of mid-to-large batteries like Gen. 5 constantly increased."

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

But the electronics materials business saw a 24 percent decline in sales, with operating profit plunging 62.4 percent on weak demand for organic light-emitting diode (OLED) displays.

Samsung SDI predicted a rosy second quarter.

"Sales of Gen.5 batteries will likely increase, driven by client automakers releasing new models," the company said. "Sales of pouch-type batteries will also grow."

Samsung SDI's pilot plant for solid-state batteries in Suwon, Gyeonggi, is expected to start operations in the second quarter. Solid-state batteries are touted as "dream batteries" for their high energy density and safety but have yet to be commercialized.

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, which are batteries with a diameter of 46 millimeters and a height of 80 millimeters. They have a higher energy density than existing batteries, reducing battery costs by 50 percent.

Samsung SDI recently announced it will build a $3 billion battery plant with General Motors in the United States, though specific details have not been disclosed.

It will be the Korean battery maker's second manufacturing plant in the United States, after one in Indiana that is under construction with Stellantis.

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