SK Innovation “This year’s target for battery sales in the mid to late 3 trillion”

▲ SK innovation battery cell. ⒸSK Innovation

On the 29th, SK Innovation announced in a conference call to announce the results, “This year, the battery business is expected to achieve sales in the mid- to mid-to-late range of KRW 3 trillion, more than double the annual sales of last year, thanks to the expansion of production capacity and the increase in global OEM volume.” “The target is mid- to 5 trillion won in sales.”

“This year’s operating profit is expected to reduce operating loss by 30% compared to the previous year by adding new volume expansion by stably operating overseas production sites. We are aiming to convert to EBITDA Plus. We expect to exceed the break-even point in 2022.” I look forward to it.

Regarding the status of battery orders, he explained, “We are continuing to win orders for new programs not only from existing customers such as Daimler and Hyundai-Kia Motors, but also from various OEMs. The current order balance is 550GWh, and when converted into sales, it is around 70 trillion won.”

He added, “We did not reflect the order receipts we are discussing with finished car companies, and we are continuing to discuss them.”

To this end, facility investment will be conducted at a level similar to last year.

SK Innovation said, “Last year, facility investment was about 4.4 trillion won per year. We will continue to invest this year to cope with existing battery orders and new orders.” “We will continue to invest.”

Prior to the announcement of the results, SK Innovation announced that it will invest 1.267 trillion won in Hungarian subsidiary SK Battery Hungary Kft to invest in a new battery plant in Europe.

SK Innovation is operating a battery plant 1 with an annual capacity of 7.5GWh in Komarom, Hungary, completed at the end of 2019. The 2nd plant with a size of 9GWh is also being expanded with the aim of mass production in the first quarter of this year.

In this regard, SK Innovation affirmed at Concall that “the 3rd plant in Hungary will be started in March.” SK Innovation plans to announce additional information in the afternoon of this day.

It also mentioned the listing of SK I Technology (SKIET).

SK Innovation said, “We are preparing to list SKIET during this year to increase the value of the materials business,” and “the details have not been decided yet.”

Next, regarding the strength of SKIET, he said, “We have facilities that are at least 50-100% more efficient than Japan and China,” and “Even though it is an ultra-thin membrane, there has never been an accident or problem. SCM (Supply Chain Management) required by overseas OEMs. The localization of the side is being realized better than other companies.”

Regarding that the day before, Prime Minister Jeong Sye-gyun mentioned that an amicable agreement is necessary before a lawsuit with LG Energy Solutions, he said, “It is difficult to give a specific answer to the case being sued.” “The conclusion will be made after considering the unsuccessful infringement of trade secrets and public interests arising from this dispute.”

“It is difficult to predict the results of the judgment, but in any case, we are considering concretely how to minimize the damage to our customers, our company, and the Korean battery industry, and we will do our best for a smooth conclusion including agreement with the other party.” He added.

On the other hand, on the same day, SK Innovation announced that in the fourth quarter of last year, it recorded sales of 7,6776 billion won and operating loss of 243.4 billion won. Sales fell 34.0% from 11,6473 billion won in the previous year, and operating loss turned to a deficit from 87.3 billion won a year earlier.

The annual sales amounted to 34,164.5 billion won, which was 30.7% lower than the previous year’s 49,306.9 billion won, and the operating profit turned to a negative (-) 2,5687 billion won from 1.13 trillion won.