Samsung SDI reports record Q3 revenue as EV battery sales surge

Samsung SDI reported surging revenues for the third quarter this year largely due to increasing sales of premium EV batteries.

Samsung SDI CEO Choi Yoon-ho talks during an event celebrating the company's 53rd anniversary in Yongin, Gyeonggi, in August. [SAMSUNG SDI]

Samsung SDI reported surging revenues for the third quarter this year largely due to increasing sales of premium EV batteries.

The Korean battery maker posted 5.95 trillion won ($4.4 billion) in the third quarter, up 10.8 percent on year, in line with market consensus compiled by FnGuide.

The quarterly figure is a record-high figure for any third quarter in the company's history.

Operating profit, however, fell 12.3 percent to 496 billion won during the July-to-September period, missing the market expectation of 506.2 billion won.

Net profit came in at 622.4 billion won during the same period, down 2.5 percent on year, beating the market expectation of 500 billion won.

Samsung SDI's electric car batteries [SAMSUNG SDI]

Samsung SDI attributed growing sales of EV batteries to the strong performance, as sales of prismatic- and cylindrical-type batteries jumped 60 percent in the third quarter compared to a year earlier.

Battery sales rose 10.5 percent to 5.3 trillion won during the period thanks to growing sales of its Gen.5, a nickel-cobalt-aluminum (NCA) battery with 88 percent nickel content. The main client for Gen. 5 batteries is BMW.

"In terms of EV battery sales, the operating margin stood at an all-time high of 9.3 percent," said a spokesperson for Samsung SDI.

Sales for the battery materials business stood at 608.2 billion won, up 13.9 percent on year.

Samsung SDI aims to further increase sales in Europe, with it recently signing a seven-year supply battery deal with Hyundai Motor for its next-generation P6 battery. The P6 battery is the company's newest NCA prismatic battery with 91 percent nickel content.

Samsung SDI also said it will build its second U.S. battery plant with Stellantis, on top of its under-construction $2.5 billion plant in Kokomo, Indiana.

Its production capacity is expected to grow at an annual rate of 30 percent to reach 230 gigawatt-hours by 2026.

Samsung SDI also recently started supplying its clients sample sets of its batteries with 46 millimeters in diameter.

"We are set to mass produce batteries with 46 millimeters in diameter starting in 2026, and the solid-state batteries in 2027," Michael Son, senior vice president of the company during a conference call on Thursday.

Son also said the company is developing lithium iron phosphate, or LFP, batteries to pursue low cost and safety. LFP batteries are increasingly favored by global automakers with their reduced risks and lower cost, but around 95 percent of the market is controlled by Chinese manufacturers including CATL.

Samsung SDI closed at 423,000 Thursday, down 5 percent from the previous trading day.

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