SEOUL, Nov. 2 (Korea Bizwire) – Samsung SDI Co., a South Korean battery maker, said Tuesday its third-quarter net profit jumped 74.7 percent from a year earlier backed by robust sales in electric vehicle (EV) batteries.
Net income reached 420.4 billion won (US$357.6 million) in the July-September period, compared with 240.6 billion won from a year earlier, the company said in a regulatory filing.
Operating profit hit a record high of 373.5 billion won, up 39.7 percent from a year earlier. Sales also hit a record high of 3.43 trillion won, up 11.4 percent in the same period of last year.
The operating profit was 6 percent higher than the average estimate, according to the survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
The stronger bottom line came as its midsized battery sector, primarily EV batteries, fared better than expected due to increased sales in high value-added products, despite weaker demand amid the global supply shortage of memory chips for vehicles, the company said.
“The semiconductor chip shortage issue for vehicles is being prolonged, but electric vehicles are relatively less affected by production disruptions as automakers put priority in allocating the semiconductors to electric vehicles, as opposed to internal combustion engine vehicles,” Kim Jong-sung, chief financial officer and vice president of Samsung SDI, said in a conference call.
“We will closely respond to market changes in order to achieve our target of an annual surplus in the vehicle battery business this year,” Kim said.
The small batteries division also posted a sales increase, and its profitability improved, led by higher demand in electric and e-mobility vehicles, as well as smartphones and wearables.
Its battery sector posted an operating profit of 201.8 billion won, up 46 percent from a year earlier. Revenue rose 15 percent to 2.74 trillion won.
The company said it will work to enhance the energy density of its premium products by utilizing high-nickel cathode and silicon anode materials, and strengthening the fast-charging function, while expanding the use of manganese as an alternative to cobalt for price competitiveness.
Sales in electronic materials, such as those used in semiconductors and OLED display panels, slipped 0.7 percent on-year to 698.9 billion won, but its operating profit soared 32.9 percent on-year to 171.7 billion won.
The company gave a positive outlook for the fourth quarter, citing robust demand expected in batteries for EVs, as well as smart applications and devices.
Shares in Samsung SDI rose 1.11 percent to 731,000 won on the main Seoul bourse Tuesday, almost on par with the broader KOSPI’s 1.16 percent gain. The earnings result was released after the market opened.