SEOUL, Jan. 27 (Korea Bizwire) — South Korean battery maker Samsung SDI Co. said Thursday its net profit rose 14.6 percent in the fourth quarter from a year earlier, backed by solid growth in EV battery sales.
Net income came to 391.6 billion won (US$325.6 million) in the October-December period, compared with a profit of 341.8 billion won from a year earlier, the company said in a regulatory filing.
Operating profit rose 7.9 percent on-year to 265.7 billion won, while sales increased 17.4 percent to 3.81 trillion won over the cited period.
The operating profit was 28 percent lower than the average estimate compiled by Yonhap Infomax, the financial data firm of Yonhap News Agency.
Solid sales in Energy Storage System (ESS) and battery backups, known as the uninterruptible power supply (UPS), also helped the bottom line improve.
For all of 2021, the company booked 1.25 trillion won in net profit, almost twofold from the previous year.
The operating income reached a record high of 1.06 trillion won last year, up 59 percent, with the annual revenue coming in at a record 13.55 trillion won, also up 20 percent from the previous year.
By sector, its battery business, mostly involving EV batteries, posted 3.1 trillion won in sales in the fourth quarter, up 18.2 percent from a year earlier. Its operating income reached 120.2 billion won, up 2.7 percent from the previous year.
It booked 708.7 billion won in sales from electronics materials, such as those used in semiconductors and OLED display panels, up 13.9 percent from a year ago, while the operating profit advanced 12.6 percent on-year to 145.5 billion won.
The company forecast that the bottom line will further improve this year as demand for mid- to large-size batteries is expected to continue to grow.
“We expect solid growth in Gen. 5 sales in 2022 as we have a supply plan for a new project from the second half,” Michael Son, senior vice president at Samsung SDI, said during a conference call, without elaborating on the planned new supply.
It also predicted the small battery sector will fare better in the first quarter on the back of higher demand for pouch batteries used in smartphones.
Regarding the lithium iron phosphate batteries (LFP), Son indicated that his company intends to stick to high-nickel cathodes for ESS for now, considering the LFP’s low energy density cited as a major disadvantage.
“We are working to achieve cost competitiveness through cobalt-free or cobalt-less technologies, but we’ll also keep a close watch on the LFP trend,” Son said.
The iron-based LFP batteries’ strength is in thermal stability, compared with the lithium ion batteries that use nickel, cobalt and manganese. This has attracted automakers following a series of fires in lithium ion battery-powered EVs that have resulted in recalls.
Shares in Samsung SDI tumbled 6.16 percent to close at 594,000 won on Thursday, underperforming the broader KOSPI’s 3.5 percent fall. The earnings results were announced before the market closed.