SK Innovation, the South Korean conglomerate mostly focused on its Refining, Petrochem and Lubricants divisions – but also a manufacturer of lithium-ion EV batteries and battery materials, announced its third-quarter financial results.
The company improved its position compared to the previous quarter, but the situation is still difficult compared to a year ago.
- sales: 8,419.2 billion KRW ($7.42 billion), down 32% year-over-year
- operating profits: -29.0 billion KRW (-$25.6 million)
- pre-tax income: 12.2 billion KRW ($10.8 million)
The category named “Other”, which includes electric vehicle batteries and battery materials is only a small part of the entire company, but it’s expanding (from 6.2% of revenues in Q2 to 7.0% in Q3). So far it’s also not profitable yet.
- sales: 589.4 billion KRW ($520 million)
- operating profits: -102.8 billion KRW (-$90.7 million)
- pre-tax income: -79.2 billion KRW (-$69.9 million)
The EV battery business is probably the fastest-growing part of SK Innovation. Revenues in Q3 increased by 155% year-over-year to 486.0 billion KRW ($428.6 million).
EV batteries are still not yet profitable for SK Innovation, but thanks to the growing scale, operating losses are decreasing – to 98.9 billion KRW ($87.2 million) in Q3.
With all the new plants listed on the slide below, we guess that it’s just a matter of time to make profits:
An important thing is that the SK Innovation is also producing EV battery materials and this part is profitable for quite some time: operating profits decreased in Q3 though to 29.9 billion KRW ($26.4 million).
According to the latest news, SK Innovation will significantly expand its battery material production in the coming years, both for own needs and for other manufacturers.