Yahoo Finance

• Q3 Revenue: KRW3.9 trillion, down 4% QoQ and 30% YoY.

• Operating Profit: KRW129 billion, down 46% QoQ and 72% YoY.

• Battery Business Revenue: KRW3.6 trillion, down 5% QoQ and 31% YoY.

• Battery Business Operating Profit: KRW63.5 billion, down 69% QoQ and 85% YoY.

• Electronic Materials Revenue: KRW263 billion, up 24% QoQ.

• Electronic Materials Operating Profit: KRW66.4 billion, up 102% QoQ and 24% YoY.

• Pretax Profit: KRW266 billion.

• Net Profit: KRW230 billion, including KRW3.6 billion from discontinued operations.

• Total Assets: Increased to KRW381 trillion.

• Liabilities: KRW17.9 trillion, up by KRW416 billion QoQ.

• Debt to Equity Ratio: Rose slightly to 80%.

• Warning! GuruFocus has detected 6 Warning Signs with FRA:XSDG.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Samsung SDI Co Ltd (FRA:XSDG) has solidified its foundation for medium to long-term growth by finalizing a joint venture contract with GM and winning new orders from major OEMs in Europe and Asia.

• The electronic materials segment showed significant improvement with a 24% quarterly increase in revenue, driven by OLED materials, and a 102% increase in operating profit.

• The company received the highest ESG rating of A+ by KCGS, reflecting its strong commitment to environmental and social governance.

• Samsung SDI Co Ltd (FRA:XSDG) is expanding its ESS business, with increased utility sales in the US and plans to drive earnings growth by expanding EU sales.

• The company is preparing for the mass production of the 46 pipe battery early next year, with significant demand growth expected in the coming years.

Negative Points

• Q3 revenue decreased by 4% quarter-over-quarter and 30% year-over-year, with operating profit declining 46% QoQ and 72% YoY.

• The battery business faced a 31% YoY revenue decline due to slowing market demand for small batteries and a base effect from one-off profit in the previous quarter.

• The EV battery segment experienced weakened profitability due to slower EU demand and foreign exchange effects.

• The small battery segment continued to face challenges with slow market recovery and inventory adjustments, impacting results.

• The cylindrical battery business is experiencing a slowdown due to sluggish demand for power tools and e-bikes, with a full recovery not expected until the second half of 2025.

Q & A Highlights

Q: Can you shed some light on the joint venture agreement with GM, particularly regarding GM's decision to adopt prismatic batteries and plans for capacity expansion? A: Jong-sung Kim, CFO, explained that the joint venture with GM will be located in Indiana, producing prismatic premium P6 batteries for GM from 2027 to 2034. The initial capacity is 27 GWh per year, with potential expansion to 36 GWh. GM chose prismatic cells for their high energy density, meeting the demand for longer driving ranges in the US. Samsung SDI is exploring further expansion options in the US, including JVs with other OEMs.