Samsung SDI announced that in the second quarter of 2024, it recorded sales of 4.45 trillion won and operating profits of 280.2 billion won on the 30th.
Sales decreased by 1.39 trillion won (24%) compared to the same period last year and by 680.8 billion won (13%) compared to the previous quarter; operating profits fell by 170 billion won (38%) year-on-year but increased by 12.8 billion won (5%) quarter-on-quarter.
The battery segment’s sales fell to 3.87 trillion won, a decrease of 1.39 trillion won (27%) compared to the same period last year and down 708.9 billion won (15%) from the previous quarter. Operating profit was 208 billion won, decreasing by 180.1 billion won (46%) year-on-year and down 6.5 billion won (3%) quarter-on-quarter. The operating profit margin recorded 5.4%.
The electric vehicle battery segment saw a decline in sales due to weakened market demand. In contrast, sales and operating profits in the ESS segment increased due to rising demand for high-performance UPS batteries and SBB due to the expansion of renewable energy generation and AI markets.
In the small battery category, cylindrical batteries experienced a decrease in sales due to customer inventory adjustments, but operating profit increased due to one-time compensation from long-term supply contracts. Pouch batteries faced a decline in sales due to weak front-end demand.
The electronic materials segment reported sales of 577.2 billion won, up 6.7 billion won (1%) year-on-year and 28.1 billion won (5%) compared to the previous quarter. Operating profit rose to 72.2 billion won, an increase of 10.1 billion won (16%) year-on-year and 19.3 billion won (36%) compared to the previous quarter. The operating profit margin was 12.5%.
The sales and operating profits for polarizing films increased due to expanded sales of high-value large-format TV products. Performance in semiconductor materials improved through expanded sales to major clients, and despite decreased demand, the entry of new IT products helped minimize sales declines in OLED materials.
Despite the challenging business environment in the first half of the year for electric vehicles, Samsung SDI maintained relatively solid results under its management policy of “profitability-focused qualitative growth”, continuously preparing for accelerated future growth.
Samsung SDI is expanding sample supply of solid-state batteries to five customers, progressing toward commercializing solid-state batteries. To respond to the demand for volume markets and entry-level electric vehicles, the company is constructing an LFP development line to ramp up production by 2026. Notably, cylindrical batteries will begin mass production earlier than planned, targeting early 2025 following the acquisition of new clients in the M-Mobility sector.
Additionally, the company has secured a large-scale power ESS project with the largest utility in the U.S. and is in discussions for additional long-term supply quantities with major clients based on SBB.
While the recovery in the second half of 2024 is expected to lag behind initial forecasts, long-term growth in the battery industry is anticipated to remain strong.
The automotive battery segment is showing weak front-end demand but gradual recovery is expected starting in the fourth quarter. Samsung SDI plans to expand the supply of P6 batteries in the Americas and improve performance through early mass production of SPE (StarPlus Energy) to prepare for future growth.
The ESS segment is expected to experience demand growth focused on power and high-performance UPS batteries in the second half, continuing the trend of sales expansion. Samsung SDI aims to improve profitability alongside sales growth through securing new orders from major clients in the Americas.
In the small battery segment, sales expansion will be pursued through new business opportunities. Cylindrical batteries will target markets for power tools and outdoor electric equipment (OPE) by leveraging differentiated products offering high output, long life, and rapid charging. Plans for sustained efforts in securing new customers while preparing for mass production of 46mm cylindrical batteries will continue. Pouch batteries will focus on boosting sales of flagship models and ensuring timely entry of new flagship models.
Performance in the electronic materials segment is expected to improve, particularly in semiconductor and OLED materials. Performance is projected to improve in semiconductor materials due to improved memory market conditions, while OLED materials anticipate volume increases through clients’ new platform entries. Demand for polarizing films is expected to wane due to client inventory impacts, but recovery in demand is anticipated for the fourth quarter due to major events such as Black Friday.
Samsung SDI is steadily preparing for improved performance and future sustainable growth in the second half. To achieve this, the company plans to maximize revenue to overcome demand slowdown, innovate cost structures to improve profitability, and secure future technologies to lead the market.
Choi Yoon-ho, CEO of Samsung SDI, stated, “While the second half is expected to remain challenging, how the company responds could present a significant opportunity for the future.” He added, “As the market turns around, we will secure differentiated competitiveness to seize new opportunities.”
Meanwhile, Samsung SDI published the ‘Sustainability Management Report 2024’, detailing its ESG management activities and performance on June 28.
This report covers the company’s achievements and goals in areas such as renewable energy transition and greenhouse gas reduction, enhancing supply chain sustainability, securing global talent and organizational culture based on diversity and inclusion, and key Board activities like the introduction of the lead independent director system and ethical compliance management.
By Sangjin Lee daedusj@autodiary.kr