Samsung SDI (006400) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached KRW 3,576.4 billion, up 12.6% year-over-year but down 7.3% sequentially, with energy solutions accounting for 94% of sales.

• Net income turned positive at KRW 56.1 billion, reversing losses from both the previous quarter and prior year.

• Operating loss narrowed to KRW 155.6 billion, a significant improvement from both Q4 2025 and Q1 2025.

• EBITDA surged to KRW 428 billion, up 56.6% quarter-over-quarter and 542.7% year-over-year.

• Assets grew to KRW 44,506.3 billion, equity to KRW 24,910 billion, and liabilities to KRW 19,596 billion.

Financial highlights

• Battery/energy solution revenue increased 13% year-over-year to KRW 3,354.3 billion, despite a 7% sequential decline.

• Electronic materials revenue rose to KRW 222.0 billion, with operating profit of KRW 21.0 billion.

• Gross margin improved to 16.4% from 6.4% in Q1 2025.

• Cash and cash equivalents stood at KRW 1,738 billion at quarter-end.

• CapEx for Q1 was KRW 589.4 billion, mainly for energy solution capacity expansion.

Outlook and guidance

• Losses are expected to further narrow in Q2, with a return to quarterly profitability targeted for the second half of 2026.

• No cash dividends are planned for 2025–2027 due to ongoing investments and negative free cash flow; dividend policy will be reviewed in 2028.

• Key initiatives include ramping up U.S. ESS production, expanding cylindrical battery and electronic materials customer bases, and winning EV volume model projects.

• EV market demand is expected to recover, especially in Europe, supported by increased subsidies and higher ICE vehicle costs.

• ESS demand, particularly for AI data centers, is projected to grow rapidly in the U.S., with local production and supply chain adjustments underway.