Seoul, July 4 (IANS) Samsung SDI’s electric vehicle (EV) battery business is expected to have turned to operating profit for the first time in the second quarter on strong demand by global automakers, analysts said on Sunday.
Samsung SDI, the battery arm of Samsung Electronics Co., was forecast to have posted 3.4 trillion won ($3 billion) in sales and 252.7 billion won in operating profit in the April-June period, according to the data from 15 local brokerage houses compiled over the past month.
Samsung SDI’s medium- and large-battery division, which makes batteries for EVs and energy storage systems (ESS), is expected to have swung to operating profit in the second quarter for the first time as it has clinched more deals from EV makers, they said.
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, reports Yonhap news agency.
In contrast, its bigger rival LG Energy Solution Ltd. was expected to have logged sluggish earnings in the second quarter due to one-off costs for its ESS battery recall.
Last month, the subsidiary of LG Chem Ltd. said it will voluntarily replace lithium-ion batteries used in ESS over potential fire risks, which is estimated to cost around 400 billion won.
ESS batteries produced in the Nanjing factory in China between April 2017 and September 2018 are subject to the replacement, the firm said.
Despite the ESS-related costs, analysts predicted LG Energy to book robust earnings this year as the firm will receive 2 trillion won in battery suit settlement money from its smaller rival SK Innovation.
SK Innovation Co., a refinery-to-battery company, was projected to have posted upbeat sales in the April-June period thanks to rebound in its mainstay petrochemical business and growing EV battery demand.
SK Innovation was forecast to have raised around 700-800 billion in revenue from its battery business in the second quarter, following 526.3 billion won in sales three months earlier.