SKIET, 649.6 Billion KRW Revenue and 32 Billion KRW Operating Profit... Turnaround in One Year

An employee is inspecting the separator produced by SK IE Technology. Photo by SK IE Technology

SK Innovation's materials business subsidiary, SK IE Technology (SKIET), has succeeded in turning a profit after one year.

On the 2nd, SKIET announced that it recorded sales of 649.6 billion KRW and an operating profit of 32 billion KRW last year. Compared to 2022, sales increased by 63.8 billion KRW and operating profit by 84.3 billion KRW.

In particular, in the fourth quarter of last year, SKIET posted sales of 172.5 billion KRW and an operating profit of 26.9 billion KRW. This significant improvement in earnings was attributed to ▲the base effect of regular maintenance at overseas factories and cost reduction ▲receipt of incentives from the Chinese subsidiary.

SKIET is drawing attention as it continues to record rising operating profit margins in its core LiBS business. The operating profit margin of the LiBS business rose from -2.9% in Q4 2022 to 1.3% in Q1 2023, and then reached 17.6% in the last quarter, showing an upward trend.

Given the recent trend of generally declining operating profit margins among domestic and international advanced manufacturing companies due to the global economic slowdown, the double-digit operating profit margin achieved by SKIET is regarded by the market as a very encouraging level.

SKIET plans to announce investment plans related to the establishment of a separator factory in North America within this year. To secure mid- to long-term business stability, it intends to secure sufficient order volumes before entering the North American market. The North American factory is being considered with a target of commercial operation in 2028, when the localization requirement for battery parts will rise to 90% under the Inflation Reduction Act (IRA) regulations. Currently, SKIET is known to be negotiating separator supply with various customers, including domestic and overseas battery cell manufacturers as well as global original equipment manufacturers (OEMs).

Meanwhile, SKIET announced on the same day that it will discontinue its new business, the Flexible Cover Window (FCW) business, to strengthen its business portfolio. The company plans to complete the discontinuation process of the FCW business in the first half of this year and focus on the separator business, which is experiencing increasing demand. Research on other new businesses, such as CO2 capture separators and next-generation battery materials like solid electrolytes, will continue.

An SKIET official stated, "Based on excellent technology, cost competitiveness, and global supply stability, we will continuously strengthen our order competitiveness," adding, "We will also establish and execute a customer diversification strategy optimized for the rapidly changing business environment to lay the foundation for strengthening leadership in the global market."