Plan to launch new corporation 'SK Battery' in October
Continuous supply in the second half of the year to Hyundai Motors and Volkswagen
Aiming to become the third largest in the world by laying the
SK Innovationis spinning off the battery business. With high-capacity NCM (nickel, cobalt, manganese) batteries used in electric vehicles in their front line of business, and rising numbers of orders from global automakers such as Hyundai Motor, Ford, and Volkswagen, their result of business is improving. After the spin-off of the battery business, SK Innovation is drawing attention as theyare re-centering their battery business on electric vehicles.
SK Innovation announced on the 4th that theyare expected to turn into profit-making in the battery business next year in a conference call for the 2nd quarter earnings release.
They also explained that it will pursue a physical spin-off with the goal of leaping to the third place in the global battery market based on orders on hand of 130 trillion won (order amount 1TWh+a) for electric vehicle batteries. After the approval of the extraordinary meeting of shareholders in mid-September, the company plans to officially launch the new battery corporation 'SK Battery' in October.
Hyung-jo Yoon, head of SK Innovation’s battery planning department, said, “Electric vehicle battery factories in the U.S., Hungary, and China have started operating in earnest.We will rapidly expand our battery production capacity to more than 200GWh in 2025 and 500GWh in 2030 in order to supply in a timely manner.”
They are expected that through this spin-off, the battery company's value could be properly evaluated. The battery business requires a lot of investment, but it is not easy to make a profit. After laying the foundation for realizing profits this year, SK Innovation explained that it will start making actual profits next year. This is due to the commercial operation of global battery factories and the full-fledged supply of battery orders.
SK Innovation's battery supply will increase rapidly from the second half of this year. They plan to supply batteries to Hyundai Motor's 'IONIQ 5', Volkswagen's 'ID.4', and Ford's 'F-150'. SK Innovation is rapidly growing in the electric vehicle market with their competitiveness in manufacturing NCM batteries, which are mainly used in electric vehicle batteries.
SK Innovation plans to discover the second battery business by strengthening its business capabilities such as battery business discovery and mergers and acquisitions (M&A). They also plan to grow its waste battery recycling business, BaaS (Battery as a Service), and energy storage system (ESS) business in earnest.
One of SK Innovation official said, “We will promote new battery applications such as robots and flying carsand accelerate the development of new growth engines such as platform business that expands services beyond battery products.”
The company will also strengthen its business capabilities through spin-off of the exploration & production (E&P) division. The company plans to promote the transition to an eco-friendly business model with the goal of minimizing carbon emissions by utilizing its long-term E&P business experience and capabilities.
Meanwhile, SK Innovation turned into profit-making with an operating profit of more than 500 billion won in the second quarter. It posted an operating profit of 506.5 billion won, exceeding 1 trillion won in operating profit in the first half of the year. It is the first time in three years since 2018 to achieve 1 trillion won in operating profit. Sales recorded 11,119.6 billion KRW, exceeding market expectations.
SK Innovation official said, "Battery sales achieved more than 500 billion won in sales for two consecutive quarters, and the high value lubricant business recorded the highest quarterly operating profit ever."
Operating profit from the battery materials business recorded 41.4 billion won, an increase of 9.7 billion won from the previous quarter, thanks to the increase in sales volume following the operation of SK ie technology’s(SKIET) Chinese plant and production stabilization.
By Staff Reporter Ji-woong Kim (jw0316@etnews.com)