SK Innovation “Battery sales exceeded 3 trillion won this year…5 trillion won next year”

Enter 2021.01.29 12:14 | Revision 2021.01.29 12:54

SK Innovation announced that it will generate more than 3 trillion won in sales this year in the battery business. Regarding the recent battery lawsuit, which even Prime Minister Jeong Sye-gyun stepped up to express concern, he said, “We are thinking about ways to minimize damage to our company, our customers, and the Korean battery industry.”

On the 29th, SK Innovation said in a conference call held after the 4th quarter of last year’s earnings announcement, “We will achieve mid- to 3 trillion won sales, more than twice the annual sales of last year, thanks to the expansion of battery volume this year.” The sales target for next year is set at 5 trillion won.

“It is expected that this year’s operating loss will decrease by 30% from last year,” he said. “It will reach the break-even point (BEP) by 2022.” The annual production capacity is to be expanded to 125GWh (gigawatt hours) by 2025.

On the same day, SK Innovation announced that it recorded an operating loss of KRW 2.6587 trillion, as its main business was sluggish due to the corona shock last year. Compared to the previous year, it turned into a deficit. Sales decreased 30.7% to KRW 34,163.5 billion. In particular, the oil business was hit directly by the decline in demand for petroleum products.

However, the battery business’ sales grew rapidly, recording 1.61 trillion won, which doubled from the previous year. SK Innovation predicted that the battery division’s performance will continue to improve as battery factories in Europe and China begin mass production from this year.

In a conference call on the day, Hyung-jo Yoon, head of SK Innovation’s battery planning department, said, “We will start operating plants in Huizhou and Yeoncheon, China from this year. He said, “We will continue to expand battery production facilities in Europe, China and the United States.”

SK innovation (096770)Is expected to invest 4 to 4.5 trillion won in facility investment this year, of which 70% will be used for investment in batteries and separators.

In addition to the separator, it will also internalize the production of battery materials. SK Innovation said, “We have internalized the separator, which is one of the main materials of the battery, but we are outsourcing other materials such as cathode materials. We are considering various options as materials need to be internalized in terms of securing supply stability.” He added, “In the case of high-nickel cathode materials, we are outsourcing at the level of internalization, and we will announce when specific plans for internalization are established in the future.”

It also mentioned LG Energy Solutions and battery litigation in the US. SK Innovation said, “It is difficult to predict the outcome of the final decision of the US International Trade Commission (ITC) scheduled for February 10, but in any case, we continue to think about ways to minimize damage to our company, customers, and the Korean battery industry.” “We plan to do our best to smoothly close the lawsuit, including agreement, through cooperative and constructive dialogue efforts with the other party (LG Energy Solutions).”

Yoon Hyung-jo said, “The current litigation-related expenses are reflected as 100% operating loss in the battery business. Compared to pure business activities, the operating loss may seem excessive, but if the risk related to litigation is resolved, operating profit will be greatly improved. “I will.”