SKIET Reports Operating Loss of 291 Billion KRW Last Year... Switched to Deficit Compared to Previous Year

"Large One-Time Costs Related to Inventory Incurred"
"Performance Expected to Improve This Year with New Customer Orders"
Recent LFP Separator Contract... Expectations for Profitability Recovery

SK Innovation Energy Technology (SKIET) recorded sales of 217.9 billion KRW and an operating loss of 291 billion KRW last year, turning to a deficit compared to the previous year.

SKIET announced this information through its earnings report on the 6th. In the fourth quarter of last year, it posted sales of 59.3 billion KRW and an operating loss of 91.9 billion KRW. Although separator sales volume increased by 12% compared to the previous quarter and operating expenses were reduced, the poor performance was analyzed to be influenced by the fixed cost burden due to sluggish demand in the upstream industry and an increase in one-time costs related to inventory.

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In the earnings announcement on the same day, SKIET stated, "As of the end of last year, we reduced the scale of inventory assets by about 24% compared to the second quarter," and added, "We plan to continue efficient facility operation until reaching an appropriate inventory level to improve profitability." SKIET explained that meaningful sales growth is expected this year through shipments to new customers scheduled and additional cooperation with existing customers. At the same time, the company plans to increase factory utilization rates to reduce fixed cost burdens.

According to the disclosure on the 5th and the company's explanation, SKIET signed a new supply contract worth 290 billion KRW over five years starting this year for prismatic lithium iron phosphate (LFP) battery separator raw materials. The contract counterpart was not disclosed due to confidentiality agreements. SKIET stated that profitability recovery is expected through this contract. Through this, SKIET secured a product portfolio capable of supplying all battery form factors, including cylindrical, pouch, and prismatic types.

An SKIET official said, "Some of the global customers currently under negotiation are at a meaningful stage where mid- to long-term supply contracts are being discussed," adding, "Although uncertainties remain high due to the slowdown in the upstream industry and global policies, we will respond to achieve meaningful performance improvements centered on our excellent product portfolio and global supply chain."