Samsung SDI recorded revenues of 5.9481 trillion won and an operating profit of 496 billion won for Q3 2023.
The increase in sales was driven by strong demand for automotive batteries, resulting in the highest quarterly revenue ever recorded. The operating profit for both cylindrical and prismatic batteries for automotive applications increased by over 60% compared to the previous year.
Compared to the same period last year, revenue increased by 580.1 billion won (10.8%), while operating profit decreased by 69.9 billion won (-12.3%). Compared to the previous quarter, revenue increased by 107.5 billion won (1.8%) and operating profit rose by 45.8 billion won (10.2%). The operating margin recorded was 8.3%.
Battery segment revenues were 5.3384 trillion won, marking an increase of 506.1 billion won (10.5%) from the previous year and an increase of 69.7 billion won (1.3%) from the previous quarter. Operating profit was 411.8 billion won, a decrease of 73 billion won (-15.1%) from the previous year but an increase of 23.7 billion won (6.1%) compared to the previous quarter. The operating margin stood at 7.7%.
In the large and medium-sized battery segment, the automotive battery business achieved record high profitability due to the early completion of a new line in Hungary and an increase in sales of P5 batteries being used in premium vehicles from major customers. Sales of ESS batteries slightly decreased in Q3 due to anticipated demand for new products in Q4.
The small battery segment maintained revenue levels similar to the previous quarter. Although cylindrical batteries were affected by delays in demand recovery for power tools, sales slightly increased due to increased demand for automotive batteries. Pouch-type batteries saw a modest decrease in revenue due to softening demand in the IT sector.
The electronic materials division reported revenue of 608.2 billion won, an increase of 74.3 billion won (13.9%) year-on-year and an increase of 37.7 billion won (6.6%) from the previous quarter. Operating profit was 84.2 billion won, showing an increase of 3.1 billion won (3.8%) year-on-year and an increase of 22.1 billion won (35.6%) compared to the previous quarter. The operating margin stood at 13.8%.
Despite stagnation in demand from key customers, revenue and profitability of display materials improved due to growing demand for mobile OLED and large-sized TV polarizing films. Revenue from semiconductor materials decreased due to softening demand from major clients.
Looking forward, Samsung SDI is expected to continue its robust growth in Q4, with improvements in revenue and operating profit compared to both the same period last year and the previous quarter.
The continued expansion of P5 sales in automotive batteries and anticipated growth in ESS revenue focused on power supply and UPS markets is expected. The next-generation product, P6, will continue efforts to secure new customers, and samples of solid-state batteries will be supplied to customers in earnest.
Although the demand slowdown for small batteries is anticipated to continue, efforts will be made to expand sales of cylindrical batteries, particularly in electric vehicles and e-bikes, while identifying new business opportunities in specific Southeast Asian regions. Samples of 46mm cylindrical batteries will also commence supply to customers.
In the electronic materials segment, revenue growth and improved profitability are expected due to the anticipated recovery in market conditions. The growth of OLED materials is expected to continue with the mass production of new platforms, while sales of polarizing films are planned to continue through new customer acquisition, particularly in China. Semiconductor materials are also expected to see expanded sales through new product introductions.
Since declaring its commitment to eco-friendly management, Samsung SDI has been diligently pursuing eight strategic projects including the transition to renewable energy, expanding battery recycling, and reducing water usage.
In June, Samsung SDI became the first in the secondary battery industry to obtain carbon footprint certification for two products from the UK’s eco-friendly certifying body, ‘Carbon Trust’. In September, all domestic business sites received the highest ‘Platinum’ rating for waste landfill zero certification.
In September, Samsung SDI received the ‘Excellent’ rating on the co-growth index selected by the Co-growth Committee and is enhancing ESG competitiveness in collaboration with partner companies by providing support for greenhouse gas emission calculations and conducting training for preemptive environmental risk responses.
CEO Choi Yun-ho stated, “Despite the challenging business environment, thanks to the efforts of all employees and partner companies, we have achieved improved results compared to the previous quarter. We will continue to secure technological competitiveness through next-generation battery development and increase quality growth alongside profitability.”
Lee Sang-jin daedusj@autodiary.kr