Solus Advanced Materials (336370) Q2 2025 earnings summary

Executive summary

• Q2 2025 sales declined 3.6% year-over-year and 8.7% sequentially to KRW 143.9 billion, mainly due to reduced battery copper foil volumes despite growth in high-end copper foil and OLED products.

• Revenue for H1 2025 was KRW 301,468 million, with the battery foil segment contributing 79.6%, OLED 18.5%, and advanced materials 5.0%.

• EBITDA dropped 60.0% year-over-year but improved 52.9% sequentially to KRW 2.6 billion, aided by higher-margin product sales and cost reductions.

• Operating loss for H1 2025 was KRW 30,247 million, and net loss was KRW 84,230 million, a significant decline from the previous year.

• Major restructuring included the sale of the Luxembourg-based subsidiary Circuit Foil Luxembourg for KRW 278.4 billion to secure investment for battery foil expansion.

Financial highlights

• Gross profit for Q2 2025 was KRW 108 million, down from KRW 116 million in Q1 2025.

• Operating margin was -10.4% in Q2 2025, compared to -9.7% in Q1 2025.

• Cash and cash equivalents at period end: KRW 78,757 million.

• Total assets: KRW 2,000,640 million; total liabilities: KRW 1,022,268 million.

• Net borrowings increased to KRW 6,828 million as of June 2025, with a debt ratio of 104%.

Outlook and guidance

• Battery copper foil business aims to diversify its customer base and expand high-end product supply, leveraging local production in Europe and North America.

• Focus on expanding high-end battery foil capacity in Europe and North America, with a new Canadian plant targeting 2026 mass production.

• OLED and advanced materials segments to pursue new product development and capacity expansion, especially in high-functionality polymers.

• OLED business expects higher sales in the second half of 2025, focusing on IT and smartphone segments as OLED adoption rises.