SKIET Reports 69.6 Billion KRW Loss in Q1... "Profitability Expected to Improve from Q2"

Achievements in Customer Diversification Focused on the North American Market
Sales Volume Up 10%, Operating Loss Down 25%
Impact of Growing Demand for Non-Chinese Materials

On April 30, SK Innovation Technology (SKIET) announced through a regulatory filing that its consolidated sales for the first quarter amounted to 58.2 billion KRW, with an operating loss of 69.6 billion KRW. The size of the operating loss decreased by 25% compared to the previous quarter.

An employee examining the separator of SK Innovation Technology. Provided by SKIET

SKIET's sales volume of lithium-ion battery separators in the first quarter increased by 10% compared to the previous quarter, but revenue saw a slight decline. SKIET explained that this was due to the deferral of revenue recognition caused by delayed shipments of some volumes.

SKIET expects its profitability to improve from the second quarter, driven by expanded sales to major customers and increased operation rates at its plants in Korea and Poland, compared to the first quarter. This is because, due to the high proportion of fixed costs inherent to the separator industry, higher plant utilization rates have a direct impact on reducing production costs.

In February, SKIET signed a contract with an overseas customer to supply prismatic lithium iron phosphate (LFP) battery separators worth 290 billion KRW, and this month, the company began supplying separator films for a global customer's North American project, continuing its streak of achievements.

During the earnings announcement, SKIET also disclosed the status of its efforts to diversify its customer portfolio. Currently, SKIET supplies separator products that can be applied to all battery form factors, including pouch, cylindrical, and prismatic types. SKIET stated that it is also continuously reviewing investments for the construction of a new plant in North America. The company is considering various options, including efficient investment execution such as brownfield projects, and plans to announce specific expansion plans as soon as a decision is made.

An SKIET representative said, "We will expand our customer base by strengthening the fundamental competitiveness of our separator products in terms of technology, cost, and quality, and will do our utmost to secure a foundation for future growth, focusing on the North American and European markets."