Samsung SDI’s battery box for energy storage systems (ESS). Yonhap News
Attention is focused on whether Korea’s battery industry can achieve an earnings rebound in the second quarter, driven by rising electric vehicle demand and expanded energy storage system (ESS) orders.
According to the industry on the 26th, Korea’s three major battery makers — LG Energy Solution (373220.KS), Samsung SDI (006400.KS) and SK On — will all release their final second-quarter earnings on the 30th.
LG Energy Solution earlier reported preliminary second-quarter revenue of 7.56 trillion won and operating profit of 113.3 billion won. While operating profit fell 77% from the same period last year, it swung to a profit compared with the previous quarter.
Samsung SDI is also expected to return to profit as early as the second quarter, rather than in the second half as initially anticipated. Based on the consensus estimate of nine brokerages that issued reports within the past month, Samsung SDI’s second-quarter loss is estimated at 17.8 billion won, sharply narrowing from an operating loss of 397.8 billion won a year earlier.
However, some brokerages have recently projected that Samsung SDI could post an operating profit ranging from at least tens of billions of won to as much as around 30 billion won in the second quarter, lending weight to expectations of a swing to profit.
SK On is also expected to significantly narrow its losses compared with the previous quarter. Hana Securities forecast that SK On “will record an operating loss of 272.8 billion won, an improvement of 76.4 billion won from the previous quarter, driven by expanded production and sales volumes and increased benefits from the U.S. advanced manufacturing production tax credit.”
With recent global high oil prices prompting forecasts that the EV chasm (a temporary demand lull) may end earlier than expected, the three battery makers are ramping up their operating rates, which had stalled. A roughly 1 trillion won third ESS central contract market tender, led by the government and beginning in September, is also expected to boost orders for the three battery makers.