Samsung SDI Reports Q1 Operating Profit of 267.4 Billion KRW, Down 29% Year-on-Year

Sales Decreased by 4% to 5.1309 Trillion Won

Samsung SDI announced on the 30th that it recorded sales of 5.1309 trillion KRW and an operating profit of 267.4 billion KRW in the first quarter of this year. Compared to the same period last year, sales decreased by 4%, and operating profit decreased by 29%.

Sales in the battery division amounted to 4.5818 trillion KRW, down 5% year-on-year. Operating profit was 214.5 billion KRW, down 32% year-on-year. Despite a slowdown in upstream demand, medium-to-large batteries recorded solid profitability. Automotive batteries saw increases in both sales and operating profit compared to the same period last year due to strong sales of the premium P5 model installed in premium vehicles, the start of supply of the P6 in the Americas, expansion of high value-added product sales, and the recognition of Advanced Manufacturing Production Tax Credit (AMPC) income. ESS batteries experienced declines in both sales and operating profit due to the off-season effect. Small batteries saw a decrease in sales, but profitability improved mainly in pouch-type batteries.

Cylindrical batteries saw a decrease in sales due to customer inventory effects centered on mobility, but power tools maintained sales and profitability at the previous quarter's level based on long-term supply contracts. Pouch-type batteries led the improvement in small battery performance with increases in both sales and operating profit compared to the same period last year, driven by strong sales of new flagship smartphones from major customers.

Samsung SDI Giheung Headquarters
Photo by Samsung SDI

Sales in the electronic materials division were 549.1 billion KRW, down 1% year-on-year, and operating profit was 52.9 billion KRW, down 10% year-on-year. The operating profit margin was 9.6%. Polarizing films expanded sales centered on large panels of 75 inches or more, and profitability improved. Semiconductor materials saw decreases in sales and operating profit compared to the previous quarter due to customers' temporary inventory adjustments.

Samsung SDI expects medium-to-large battery performance to gradually improve this year. Automotive batteries are expected to maintain solid profitability through the expansion of the new P6, and ESS batteries are expected to improve both sales and operating profit due to expanded sales of power-use SBB (Samsung Battery Box) and increased demand for high-output batteries for UPS.

Small batteries plan to pursue securing profitability while exploring new demand. Cylindrical batteries will enhance profitability and secure stable volumes based on long-term supply contracts. Early entry into the Americas OPE (Outdoor Power Equipment) and India and Southeast Asia E2Wheeler (Electric 2 Wheeler) markets will be promoted, and efforts to secure new customers and prepare for mass production of 46-pi batteries will continue. Pouch-type batteries will proactively supply major customers' new products in the second half of the year.

The electronic materials division expects sales expansion as market demand shows signs of recovery. Polarizing films will see increased sales responding to the TV market peak season demand in the third quarter, and semiconductor materials are expected to improve performance following improvements in the memory semiconductor market conditions. OLED materials are expected to be affected by seasonal off-season factors.

Choi Yoon-ho, CEO of Samsung SDI, said, "Despite the highly uncertain management environment, we are continuously pursuing qualitative growth with a competitive edge in technology and profitability superiority," adding, "We will accelerate achieving the status of a global top-tier company by 2030 through unprecedented changes and innovations."