(WNAM Monitoring): Samsung SDI Co. said Tuesday its fourth-quarter earnings tumbled 21.6 percent on-year due to sluggish demand for batteries used in energy storage system (ESS) and IT products. Consolidated net profit came to 493.3 billion won (US$370.8 million) in the October-December period, compared with 629.2 billion won from a year earlier, the company said in a regulatory filing.
Sales fell 6.7 percent on-year to 5.56 trillion won, while operating profit slumped 36.5 percent on-year to 311.8 billion won. The earnings beat market expectations. The average estimate of net profit by analysts stood at 383.3 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency. For all of 2023, the company posted 22.7 trillion won in sales, up 12.8 percent from a year ago.
Its operating income for the year fell 9.7 percent on-year to 1.63 trillion won, and net profit edged up 1.3 percent to 2.06 trillion won. Samsung SDI said it recorded a decrease in quarterly earnings due to delayed recovery of demand for ESS batteries and IT products, as well as an increase in market inventory.
Its main battery business saw its operating profit plunge 37 percent on-year to 226.1 billion won and sales drop 6.4 percent to 4.99 trillion won. Demand for automotive batteries remained solid in the fourth quarter of last year, but sales of ESS products and small batteries faced challenges.
In the electronic materials business, its sales fell 9.3 percent on-year to 566.5 billion won and operating profit tumbled 35 percent on-year to 85.7 billion won. While revenues from semiconductor materials increased thanks to recovering demand and new product application, profits from polarizer film fell due to sluggish demand.
Samsung SDI said it plans to start mass production of its premium battery product, P6, in the first quarter to enhance sales and profits, and secure projects for next-generation platforms. The P6 batteries will be mass produced starting January for customers in North America and Europe, with sales expected to contribute to the company’s earnings from the second quarter.
Despite concerns about slowing demand for electric vehicles, Samsung SDI said it will maintain factory utilization rates in 2024 and proceed with the scheduled expansion of production facilities. Shares in Samsung SDI fell 1.19 percent to close at 374,500 won on the Seoul stock market Tuesday, far underperforming the broader Korea Composite Stock Price Index’s 0.07 percent drop.
