Samsung SDI projected that this year's business conditions would reflect a shape of high-low, where the upper is lower than the lower. In light of increasing market uncertainty, it also noted that it would streamline operations and devote itself to technological development to prepare for a turnaround in performance.
During a conference call on 24th for last year's fourth-quarter earnings announcement, Samsung SDI said, "Due to demand slowdown and policy uncertainty, major clients are adjusting their inventories, making it unlikely for performance recovery in the short term. Performance is expected to improve significantly starting in the second half of the year when uncertainties are resolved."
This year, the company plans to reduce its capital expenditure (CAPEX) compared to last year. Last year's CAPEX for Samsung SDI was around 6.6 trillion won.
The company said, "We are readjusting our investment plans considering market conditions. Overall, we will proceed with a conservative approach," adding that it is working towards efficiency by reducing new line expansion costs by utilizing existing production lines or by timing certain investments.
However, it added, "We will not reduce investment in partnerships in North America for GM or the development of solid-state batteries, and will proceed without delays in scheduled plans."
Samsung SDI also noted that it has already secured orders at approximately 90% of its production capacity (CAPA) in the energy storage system (ESS) business. It also announced plans for further expansion and securing local production bases in North America.
The company stated, "Our ESS has secured orders equivalent to about 90% of our production capacity (CAPA) based on high stability and differentiated performance. Demand for ESS in the Americas is expected to continue high growth due to the expansion of the artificial intelligence (AI) industry and renewable energy."
It further stated, "We are pushing for more than a 20% increase in production capacity compared to the end of last year through improving line efficiency and converting electric vehicle lines for ESS use, and we are reviewing local production bases to respond to medium- and long-term demand, which we will share when it is finalized."
Regarding the development status of lithium iron phosphate (LFP) batteries, it explained, "Although we are a latecomer, we have already completed a platform that can differentiate us from similar companies. We are differentiating ourselves from existing products by integrating our cell form factor with materials and electrode plate technology to enhance energy density and lifespan characteristics, and we are in discussions with major clients for a mass production project in 2027. Additionally, we are building a local supply chain in line with requests from key customers."
Samsung SDI reported that its fourth-quarter earnings last year recorded revenue of 3.7545 trillion won and an operating loss of 256.7 billion won. Compared to the fourth quarter of last year, revenue decreased by 28.8%, and it shifted into a deficit. This marks the first quarterly loss for Samsung SDI in about 8 years since the first quarter of 2017 (a loss of 67.3 billion won).
The total earnings for last year were reported as a revenue of 16.5922 trillion won and an operating profit of 363.3 billion won. Compared to 2023's figures, revenue decreased by 22.6%, and operating profit fell by 76.5%.