South Korea’s SK Innovation Co. on Friday posted record sales revenue in its electric-vehicle battery business in the fourth quarter of 2020 as the company is gradually shifting away from its mainstay refinery business.
Its EV battery sales more than doubled to an all-time high of 479.2 billion won ($429 million) in the October-December period from 225 billion won a year earlier, the company said in a statement on Jan. 29.
However, the business ran an operating loss of 108.9 billion won in the fourth quarter because of initial costs related to the start of some of its overseas plants, it said.
SK Innovation said it posted an overall fourth-quarter operating loss of 243.5 billion won, swinging from a profit of 87.6 billion in the year-earlier period as its refinery and petrochemical business remained sluggish amid the pandemic.
It posted a smaller net loss of 246.8 billion won in the fourth quarter, compared with a shortfall of 438.9 billion a year earlier, while revenue fell 34% on year to 7.68 trillion won.
For all of 2020, its EV battery business revenue also more than doubled to 1.6 trillion won, rising above the 1 trillion won mark for the first time. The business, however, posted a full-year operating loss of 426.5 billion won.
AGGRESSIVE BATTERY EXPANSION WORLDWIDE
SK Innovation, which supplies batteries to carmakers such as Hyundai Motor Co., Kia Corp., Volkswagen and Ford Motor, has been aggressively expanding battery facilities worldwide, with an aim to become one of the top three players.
The company recently raised its 2025 target output capacity to 125 GWh from the previous 100 GWh to gain a greater share of the rapidly growing EV battery market.
Over the short- to mid-term, it aims to increase its total capacity from the current 40 GWh to 85 GWh by 2023, surpassing the 73 GWh capacity of Panasonic Corp., the world’s third-largest EV battery maker.
According to market research firm SNE Research, SK Innovation came in fifth with a share of 5.5% in the global EV battery sales market in the January-to-November period of 2020.
Globally, SK Innovation operates battery production sites in the US, China, Hungary and South Korea.
REFINERY MARGIN TO IMPROVE
SK Innovation’s overall revenue in 2020 declined 31% to 34.16 trillion won, weighed by the weak performance at its refinery business, which suffered from falling cracking margins.
It posted a record operating loss of 2.57 trillion won, a turnaround from a profit of 1.11 trillion won in 2019. The company also swung to a full-year net loss of 2.16 trillion won from a net profit of 65.8 billion won.
The company said it expects refining margins to gradually recover this year on the back of rebounding demand as the impact of the COVID-19 pandemic eases.
Its local peer S-Oil Corp., whose main shareholder is Saudi Aramco, on Thursday posted a record operating loss of 1.09 trillion won for 2020.
Shares of SK Innovation rose as much as 6.3% to 294,000 won on Friday on its announcement of the third EV battery plant in Europe. The stock was trading up 2% in the mid-afternoon session.
Write to Man-Su Choe at bebop@hankyung.com In-Soo Nam edited this article.
