Ecopro Posts 16.2 Billion KRW Operating Profit in Q2... Returns to Profitability on Expanded Cathode Material Sales

Sales of KRW 931.7 Billion and Operating Profit of KRW 16.2 Billion in Q2
Sales and Operating Profit Grow for Three Consecutive Quarters
Indonesian Project Investment Results Accelerate
Affiliate Companies Secure New Customers

Ecopro announced on August 6 that it posted consolidated sales of KRW 931.7 billion and operating profit of KRW 16.2 billion in the second quarter of this year, turning a profit compared to the same period last year. The company achieved a surplus for the second consecutive quarter, driven by expanded cathode material sales and the acquisition of new customers.

Exterior view of the Ecopro headquarters located in Cheongju, Chungbuk. Ecopro

By affiliate, Ecopro BM, which manufactures cathode materials, recorded consolidated sales of KRW 779.7 billion and operating profit of KRW 49 billion in the second quarter. Sales increased by 24% compared to the previous quarter's KRW 629.8 billion, and operating profit rose by KRW 46.7 billion from the previous quarter.

Ecopro BM stated, "Sales and operating profit both increased as cathode material sales for electric vehicles (EVs) grew, due to inventory adjustments by major customers and the launch of new vehicles by leading automotive OEMs. In particular, with the expansion of the energy storage system (ESS) market, sales of nickel-cobalt-aluminum (NCA) cathode materials for ESS reached KRW 81.4 billion in the second quarter, doubling from KRW 40.7 billion in the previous quarter."

Ecopro Materials, which manufactures precursors?a key raw material for cathode materials?posted consolidated sales of KRW 78.1 billion and an operating loss of KRW 28.8 billion in the second quarter. Ecopro explained, "Sales decreased by 43% compared to the previous quarter due to the decline in exchange rates and policy uncertainties in the North American EV market."

The company added, "Ecopro Materials' performance is expected to show a full-fledged recovery starting in the third quarter. Since last month, products have been shipped to new external customers, and with the incorporation of the local Indonesian smelter Green Eco Nickel (GEN) as a subsidiary, sales and profitability are projected to improve in the second half of the year."

Ecopro HN, an eco-friendly materials company, recorded consolidated sales of KRW 39 billion and operating profit of KRW 3.7 billion in the second quarter. Sales increased by 13% compared to the previous quarter's KRW 34.4 billion, and operating profit rose by 9% from the previous quarter. The company's strong performance in the fine dust reduction business drove growth. Additional improvement in results is expected in the second half as new facility investments in the front-end semiconductor industry resume.

Future Growth Drivers: Indonesian Project Results Accelerate... Affiliate Customer and Product Diversification

The holding company Ecopro is generating revenue from its mineral trading business by acquiring stakes in local Indonesian smelters QMB (9% stake) and Meiming (9% stake). By securing nickel intermediate (MHP) in proportion to its investment in the nickel smelters and selling it externally, the company has begun to realize both sales and operating profit. In the second quarter of this year, trading business sales reached KRW 41.9 billion, up 26% from KRW 33.3 billion in the previous quarter.

Unlisted affiliates are also continuing efforts to acquire new customers. Ecopro Innovation, an affiliate engaged in lithium processing, posted second-quarter sales of KRW 55.3 billion, up 17% from the previous quarter. Ecopro Innovation secured new customers last month, which is expected to boost sales, and the company plans to acquire additional customers in the second half of the year.

The company is also laying the foundation for mid- to long-term growth through product portfolio diversification. Ecopro has completed the development of high-voltage mid-nickel (HVM), lithium manganese rich (LMR), and lithium iron phosphate (LFP) cathode materials, and is currently negotiating orders with global cell makers and automotive OEMs.

For HVM, mass production is scheduled to begin in 2027. LMR can be mass-produced immediately upon order, as it can utilize existing ternary cathode material production lines. For LFP, the company currently has a mass production line with a capacity of 3,000 tons and plans to increase production capacity to 5,000 tons in the second half of the year.

With the Indonesian project results accelerating from this year, the foundation for mid- to long-term growth is expected to become even more solid. Ecopro, Ecopro BM, and Ecopro Materials invested in four Indonesian smelters and realized investment gains of KRW 56.5 billion in the first half of this year. The average annual investment gains over the next five years are projected to reach KRW 180 billion.