EcoPro BM (247540) Q4 2024 earnings summary

Executive summary

• Q4 2024 saw mixed performance across group companies, with revenue growth in some segments but continued operating losses due to inventory valuation provisions and weak downstream demand.

• Consolidated revenue declined 11% QoQ and 60% YoY, mainly from lower ESS cathode shipments and falling prices, despite a rebound in EV and PT sales volumes.

• Profitability was impacted by inventory valuation losses, though some reversal occurred due to favorable year-end forex movements.

• Annual revenue and profitability declined sharply year-over-year, but management expects a turnaround in 2025 driven by inventory normalization, new EV launches, and customer diversification.

• Listed subsidiaries saw improved profitability, but unlisted subsidiaries' inventory asset valuation allowance of KRW 82.6B increased operating losses.

Financial highlights

• EcoPro BM Q4 2024 revenue fell 11% QoQ to KRW 464.9B; operating loss improved but remained negative at KRW 9.6B.

• EcoPro Materials Q4 revenue rose 34% QoQ to KRW 88.1B; operating loss narrowed to -KRW 7.8B.

• EcoPro HN Q4 revenue up 43% QoQ to KRW 80B; operating profit up 34% QoQ to KRW 7.6B, OP margin 9.5%.

• 4Q24 consolidated revenue: KRW 4,649B (down 11% QoQ, down 60% YoY); EBIT: -KRW 96B (improved from -KRW 412B in 3Q24); EBITDA: KRW 177B.

• 2024 annual revenue down 57-69% YoY across major subsidiaries; group operating losses significant.

Outlook and guidance

• Q1 2025 expected to see revenue and profit improvement as customer inventories normalize and new EVs launch.

• 2025 full-year guidance projects sales volume growth, new OEM orders, and improved profitability from higher utilization and productivity.

• EcoPro Materials expects significant profit boost from Green Eco Nickel acquisition and mass production.

• EcoPro HN anticipates new business sales to reach 10% of total in 2025, with growth from secondary battery and semiconductor materials.

• Environmental business expects temporary sales slowdown in 1Q25 due to seasonality, with recovery in 2H24 led by battery and semiconductor materials.