SAMSUNG SDI Q2 Profits Plunge 38% Amid EV Battery Demand Slump

Seoul, South Korea - SAMSUNG SDI (006400. KS) reported a 38% drop in second-quarter operating profit as sluggish demand for electric vehicle batteries weighed on sales.

The company's operating profit fell 38% year-on-year to KRW 280.2 billion (US$202.5 million) in the three months to June, while revenue dropped 24% to KRW 4.45 trillion (US$3.22 billion). 

These results underscore EV battery makers' challenges as the industry's rapid growth begins to moderate.

SAMSUNG SDI's energy business, which includes automotive and energy storage system batteries, bore the brunt of the slowdown. 

The division's operating profit plummeted 46% compared to last year's period, settling at KRW 208 billion (US$150.3 million).

Despite these setbacks, the company maintained a relatively solid performance, with an overall operating margin of 6.3% for the quarter.

This resilience can be attributed to SAMSUNG SDI's "profitable and qualitative growth" strategy, which has positioned the company to accelerate growth once market conditions improve.

The company's electronic materials business provided a bright spot, with operating profit rising 16% year-on-year to KRW 72.2 billion (US$52.2 million). 

This segment benefited from strong sales of high-value large-panel products and improved semiconductor materials earnings.

SAMSUNG SDI expects a gradual recovery in the second half of the year, with EV market demand projected to rebound in the fourth quarter. 

The company is also making strides in next-generation battery technologies, expanding the sample supply of all-solid-state batteries to five customers and setting up a pilot line for LFP battery production.

However, the timing of market recovery remains uncertain, and SAMSUNG SDI faces the challenge of navigating a more competitive landscape as EV adoption enters a new phase.