[Click e-Stock] "Solus Advanced Materials' Turnaround Expected in Second Half of Next Year"

On October 29, IBK Investment & Securities analyzed that the timeline for Solus Advanced Materials to return to profitability, which was initially expected at the beginning of this year, will be delayed from the fourth quarter of this year to the second half of next year.

In the third quarter of this year, Solus Advanced Materials posted sales of 145.1 billion won and an operating loss of 21.2 billion won.

Lee Hyunwook, a researcher at IBK Investment & Securities, stated, "As of the cumulative total for the third quarter of this year, demand for battery electric vehicles (BEVs) in Europe increased by 28% compared to the same period last year." However, he explained, "Inventory adjustments and ramp-up delays at LG Energy Solution, a major client in Europe, and sluggish sales of certain models by key clients in North America, were observed."

He added, "Sales in the battery foil division amounted to 36.4 billion won, down 20.9% from the previous quarter, while the copper foil division posted 76.6 billion won, up 15.9% quarter-on-quarter." Furthermore, he noted, "Profitability worsened due to a heavier fixed cost burden resulting from a decrease in battery foil shipments, which increased the size of the operating loss."

Lee also stated, "Major clients, including LG Energy Solution, account for more than 90% of battery foil sales," and analyzed, "CATL's 30GWh plant in Hungary is scheduled to begin operations early next year." He continued, "With the start of volume supply, we expect to diversify our client base from the fourth quarter of this year, and in addition to the existing four clients, we anticipate starting business with four more clients next year."

He projected, "After the ramp-up period, the operating rate at the Hungary plant will rise to around 90% in the second half of next year."