Seoul: Samsung SDI Co. reported a significant decline in its third-quarter net profit, primarily due to reduced sales of electric vehicle (EV) batteries and the impact of U.S. tariff-related issues. The company's net profit for the July-September period fell to 5.7 billion won (approximately US$4 million), marking a 97.5 percent decrease from the previous year, as detailed in the company's regulatory filing.
According to Yonhap News Agency, Samsung SDI experienced an operating loss of 591.3 billion won for the third quarter, contrasting with a profit of 129.9 billion won from the same period last year. The company's sales also dropped by 22.5 percent, totaling 3.05 trillion won. The downturn in earnings was attributed to weak EV battery sales and Washington's new tariff policies, which have impacted the energy storage system (ESS) battery sector.
Kim Jong-sung, executive vice president at Samsung SDI, noted, "Since last year, demand for EV batteries has decreased, with consumers' demand shifting toward the entry segment." He further explained that while demand for ESS has been increasing in the United States, profitability has not met expectations due to tariff burdens.
Despite these challenges, Samsung SDI highlighted its efforts to promote sales of EV and ESS batteries during the July-September period, achieving "significant progress." The company announced securing multiple supply contracts, amounting to over 110 Gigawatt hours (GWh), with global automotive groups and other deals in a major government-led ESS supply project.
Looking forward to the fourth quarter, Samsung SDI anticipates improved earnings driven by a recovery in the European EV and U.S. ESS markets. The company plans to focus on strengthening its presence in the ESS market, enhancing its position in the EV sector, and improving operational efficiency.
Samsung SDI remains optimistic about its competitiveness in the U.S. ESS market, as it is currently the only prismatic battery supplier among non-Chinese battery makers. The growing preference for prismatic batteries, known for their safety and high energy density, is expected to bolster the company's market position.
Kim also expressed confidence in the future, predicting that ESS demand will continue to rise, supported by environment-friendly development initiatives and the expanding artificial intelligence industry.
Despite the weakened earnings report, Samsung SDI's shares rose to 311,500 won as of 2:03 p.m., up 9.2 percent from the previous session. The third-quarter report was released during market hours.