Bloomberg — As demand for electric vehicles increases, the demand for batteries, a key component, has also surged, boosting the performance of battery makers such as Ningde Times, LG New Energy, SK On and Samsung SDI, according to foreign media reports.
Samsung SDI, one of the top three battery makers in South Korea, has not invested in electric vehicle batteries as frequently as LG New Energy and SK On in the past two years, but their revenue has also increased significantly, driven by the increase in sales of electric vehicle batteries.
Record revenue of KRW 5.96 trillion in the fourth quarter of last year
Samsung SDI’s earnings report released earlier Monday showed that they reported revenue of 5.96 trillion won (currently about RMB 32.78 billion) in the fourth quarter of last year, up 2.14 trillion won or a 56.3% jump from 3.82 trillion won in the same period a year earlier.
In terms of earnings, Samsung SDI’s revenue in the fourth quarter of last year increased significantly year-on-year, mainly due to the increase in revenue from its energy business, including automotive batteries and batteries for smart energy storage systems, which reached 5.34 trillion won, up 2.23 trillion won from the same period last year, a 71.9 percent increase year-on-year and a 10.5 percent increase year-on-year.
Samsung SDI’s electronic materials business reported revenue of 624.3 billion won in the fourth quarter of last year, down from 708.7 billion won a year earlier and down 11.9 percent from a year earlier.
In terms of operating profit, Samsung SDI reported an operating profit of 490.8 billion won (currently about RMB 2.699 billion) in the fourth quarter of last year, much higher than the 265.7 billion won in the same period last year and up 84.7% year-on-year. Operating profit from the energy business was 359.1 billion won, up 198.8% year-on-year, while operating profit from the electronic materials business was 131.7 billion won, down 9.5% year-on-year and slightly lower than the decline in revenue.
Samsung SDI disclosed in their earnings report that their revenue and operating profit for the fourth quarter of last year were both record highs.
Full-year revenue of 20.12 trillion KRW, surpassing the 20 trillion mark for the first time
For the full year 2022, Samsung SDI’s revenue was 20.12 trillion won (currently about RMB 110.66 billion), up 6.57 trillion from 13.55 trillion in 2021, an increase of 48.5% year-over-year.
As in the fourth quarter, Samsung SDI’s full-year revenue growth was also driven by increased revenue from its energy business, including electric vehicle batteries, which posted full-year revenue of 17.57 trillion won, up 6.62 trillion won, or 60.4% year-over-year. The electronic materials business reported full-year revenue of 2.56 trillion won, down from 2.61 trillion won in the previous year and down 1.9% year-over-year.
In terms of profits, the report showed a full-year operating profit of 1.81 trillion won (currently about RMB 9.955 billion), compared with 1.07 trillion won the previous year, up 69.4% year-over-year, with the energy business contributing 1.25 trillion won, up 133.2% year-over-year.
Net profit last year was 2.04 trillion won (currently about RMB 11.22 billion), also up significantly from 1.25 trillion in 2021, up 63.1% year-on-year.
Notably, Samsung SDI disclosed in their earnings report that last year’s revenue of 20.12 trillion won was the first time their annual revenue exceeded 20 trillion won.
The automotive battery market size is expected to reach $159 billion this year
Like other companies under the Samsung umbrella, Samsung SDI also gave their expectations for the future in their fourth-quarter earnings report.
In the earnings report, Samsung SDI mentioned that in the first quarter of this year, P5 battery sales will lead to increased sales in the automotive and intelligent energy storage system battery business, and they also expect to see an increase in automotive and intelligent energy storage system battery sales year-over-year, and they also expect higher sales of automotive batteries as P5 batteries are used in new models and new production lines are put into production.
For automotive batteries, Samsung SDI expects the market to reach $159 billion this year (currently about RMB 1.08 trillion), up 39% year-over-year, despite concerns. Their concerns are mainly about the multiple negative factors that are expected to affect the demand for automobiles.
In the earnings report, Samsung SDI disclosed that they plan to continue the growth momentum driven by the entry of P5 batteries into the high-end electric vehicle market, and they will also continue their efforts to acquire new projects and develop and produce next-generation products such as solid-state batteries to pave the way for medium to long-term growth.
