Seoul: Samsung SDI said its first-quarter net profit rose 28 per cent from a year earlier as surging demand for electric vehicle (EV) batteries gave a boost to the bottom line.
Net income reached 464.5 billion won (US$347 million) in the January-March period, compared with 362.6 billion won the previous year, the South Korean battery maker said in a regulatory filing.
Operating profit came to 375.4 billion won for the three-month period, a 16.5 per cent on-year increase from 322.3 billion won a year ago. Revenue jumped 32.2 per cent on-year to 5.35 trillion won.
The earnings beat market expectations. The average estimate of net profit by analysts stood at 396.4 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
The stronger bottom line came with the continued upward momentum in the automotive and energy storage system batteries segment, propelled by the releases of new EV models equipped with its signature P5 batteries, the battery maker said.
Samsung SDI mainly produces prismatic batteries at the higher end of the EV battery market. It supplies BMW A.G., Volkswagen A.G. and Ford Motor Co.
Samsung SDI said it is working on cobalt-free and lithium iron phosphate (LFP) batteries to target the low-to-mid-end EV market and the utility energy storage system (ESS) market to diversify its product lineups.
“The EV market has centred on the premium market so far, but we expect the volume and entry markets where more consumers can buy EVs, will grow rapidly due to the electrification trend led by global automakers,” Son Michael, senior vice president for the strategic marketing team said in an earnings call.
“We’re preparing the volume segment platform, such as cobalt-free based NMX (nickel manganese) and LFP, and they are under development using our proprietary technologies, with a goal for mass production,” Son said.
It will continue efforts to advance its premium lineup, with the next generation platform P6 aiming to be mass-produced starting 2024, the company said.
Samsung SDI said it expects to continue solid growth in the second quarter, driven by burgeoning EV and ESS battery demand.
Samsung SDI announced earlier this week it is forming a joint venture with General Motors to build an EV battery factory in the US.