Samsung SDI (006400) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was KRW 4.5 trillion (₩4,450.1bn), down 13% quarter-over-quarter and 24% year-over-year, mainly due to slowed EV market demand and falling metal prices.

• Operating profit rose 5% sequentially to KRW 280 billion (₩280.2bn) but fell 38% year-over-year; net profit was KRW 301 billion (₩301.2bn).

• Battery business revenue dropped 15% QOQ and 27% YoY; electronic materials revenue increased 5% QOQ and 1% YoY, with improved profitability.

• Company maintained focus on profitability, R&D, and investment in next-generation battery technologies.

• Battery business faced headwinds from EV market weakness, while electronic materials saw improved results.

Financial highlights

• Gross margin improved to 22.2% in Q2 2024 from 17.3% in Q1 2024.

• Non-operating profit surged 275% quarter-over-quarter to KRW 97.2 billion.

• Total assets at quarter-end were KRW 37.8 trillion (₩37,782.7bn), up 7% sequentially and 15% YoY; liabilities rose to KRW 16.6 trillion.

• Shareholders' equity increased 3% from Q1 2024 and 15% YoY.

• Debt-to-equity ratio stood at 78%, up from 72% in Q1 2024.

Outlook and guidance

• Second half expected to mirror first half with continued weak demand, especially in EV batteries; gradual recovery anticipated later than previously forecast.

• Focus on maximizing revenue, expanding P6 sales in the U.S., and starting mass production at StarPlus Energy JV ahead of schedule.

• ESS battery demand and sales expected to maintain upward trend, driven by utility and UPS solutions.

• Electronic materials segment expects better performance in semiconductor and OLED materials in H2, with polarizer film demand rebounding in Q4.

• Small battery earnings may adjust downward in H2 due to one-off Q2 profit, but new business opportunities are being pursued.