Samsung SDI has blowout 2023 as revenues hit record high

Samsung SDI hit record-high revenues of 22.7 trillion won ($17 billion) last year driven by boosted sales of premium EV batteries despite the slowing EV growth globally.

Samsung SDI CEO Choi Yoon-ho speaks at the Tech & Career Forum 2023 held in Seoul in August. [SAMSUNG SDI]

Samsung SDI hit record-high revenues of 22.7 trillion won ($17 billion) last year driven by boosted sales of premium EV batteries despite slowing EV growth globally.

The Korean battery maker said Tuesday its revenues rose 12.8 percent on year to 22.7 trillion won in 2023. It is an all-time high yearly figure but slightly fell short of the market consensus of 23.1 trillion won compiled by FnGuide.

Operating profit slid 9.7 percent to 1.6 trillion won, missing the analyst expectation of 1.7 trillion won.

Net profit rose 1.3 percent to 2.07 trillion won, beating the consensus.

The all-time high annual result is largely due to boosted sales of EV batteries. Sales of its EV batteries rose 40 percent on year in 2023, while operating profit jumped 93 percent.

"Sales of mid-to-large batteries like Gen. 5 increased, though sales remain sluggish in the fourth quarter," said Kim Yoon-tae, vice president of the business management office at Samsung SDI, during a conference call Tuesday.

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 operating profit plunged 36.5 percent to 312 billion won in the fourth quarter, far below the consensus estimate of 440 billion won, while quarterly revenues fell 6.7 percent to 5.6 trillion won, also missing the consensus of 5.9 trillion won.

Battery business saw a 6.4 percent decline in sales to 5 trillion won, with operating profit plunging 37 percent to 226.1 billion won. Sales of electronics materials dropped 9.3 percent on year to 566.6 billion won.

"EV sales growth remains weak, but not in all areas," said Kim. "For instance in North America, the EV market is estimated to grow 50 percent this year."

Samsung SDI expects a bright 2024 with new orders for its Gen.6 battery, an upgraded NCA battery featuring 91 percent nickel content that translates to higher energy density.

"Mass production of Gen.6 batteries will start soon for the U.S. clients, which will contribute to our sales starting in the second quarter," said Park Jong-sun, executive vice president of the strategic marketing team during the conference call.

Samsung SDI also said it is well on its way to market solid-state batteries in 2027. Solid-state batteries are touted as "dream batteries" for their high energy density and safety, but no company in the world has yet to develop them.

Samsung SDI is developing solid-state batteries that can run 800 kilometers (497 miles) per charge and have an extended life cycle that can be charged over 1,000 times. Their commercialization is planned for 2027.

It has completed the construction of its 6,500-square-meter (1.6-acre) pilot plant for solid-state batteries in Suwon, Gyeonggi, the first of its kind in the world.

"We delivered our sample batch of solid-state batteries to our clients in the fourth quarter of last year," Kim said. "We will be able to upgrade the function by collecting feedback from clients."

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