Samsung SDI sees profit shoot up as EV market growsSamsung SDI, a battery maker 19.8 percent owned by Samsung Electronics, enjoyed a surge in profit during the first three months, driven by robust demand for electric vehicles and the growing energy storage system (ESS) business.
Its net profit reached 150 billion won ($135 million) in the January-March period, rising 20,477 percent from 729 million won a year earlier.
Operating profit soared 146.7 percent on-year to 133.2 billion won, and sales increased 23.6 percent to 2.96 trillion won over the period, the highest performance for the first quarter, the company said.
Samsung SDI said batteries and ESS drove up overall sales, while electronic materials posted a weak performance.
Looking forward, the company expects rising sales of EV batteries in the European market and robust demand for ESS in the U.S. market in the second quarter, while projecting solid demand for materials for OLED screens and semiconductors.
Samsung SDI expects demand for EV batteries to increase as automakers rush to roll out battery-powered vehicles in the coming years, expressing hope for expanding partnerships with major industry players.
"Volkswagen's battery production plan following Tesla's means that the stable supply of EV batteries is important and demand will sharply rise," said Kim Jong-sung, Samsung SDI's chief financial officer, in a conference call with analysts.
The company supplies batteries to German automaker BMW, and its batteries are set to be used in U.S. electric vehicle startup Rivian's upcoming electric pickups and SUVs.
Samsung SDI said the global chip supply shortage has not yet affected its battery production plan as global automakers are prioritizing EV production.
While the company expects a large drop in demand in the domestic ESS market due to incoming regulations, it projected an upbeat outlook in the U.S. market, which is forecast to more than double this year from 2020.
Shares in Samsung SDI slipped 0.58 percent to 685,000 won on the Kospi on Tuesday. The earnings report was released before the market closed.
BY PARK EUN-JEE, YONHAP [firstname.lastname@example.org]