Samsung SDI Keeps Losing
Samsung SDI (CEO Park Sang-jin) recorded 38.9 billion won (US$37.9 million) in operating losses in the first quarter of 2014, which is a larger gap than last year’s losses.
The sales, operating losses, and net income for the first quarter were 1.14 trillion won (US$1.11 billion), 38.9 billion won (US$37.9 million), and -39.1 billion won (-US$38.1 million), respectively.
This is a 6 percent decrease in sales from the same quarter last year, and the operating loss was 33.3 billion won (US$32.5 million) then, which proves that the loss was greater this year.
Last year, Samsung SDI scored 5.15 trillion won (US$5.04 billion) in sales and 27.4 billion won (US$26.7 million) in operating losses. The low performance of the fourth quarter was the critical blow.
The sales, operating losses, and net income of the fourth quarter of 2013 was 1.20 trillion won (US$11.8 billion), 55.6 billion won (US$54.2 million), and -196 billion won (-US$191.2 million).
On the low performance of this year’s first quarter, KTB Investment & Securities commented, “Continuing from last quarter, Samsung SDI keeps reporting an earnings shock,” and, “Huge losses from the PDP module and investment in expanding mid-to-large lithium-ion batteries to line 3 shot up the fixed costs and overwhelmed it.”
According to KTB, this number was 10 times higher than Samsung SDI’s estimate and the expectations of the market, which was a loss of 3 billion won (US$2.93 million).
The sharp drop of ASP (QoQ of -12 percent) caused by the low performance of the PDP industry which resulted in -9 percent in the rate of operating profits, and the operation of line 3 in mid-to-large lithium-ion batteries in Ulsan in the late first quarter, increased the operating losses by 10 billion won (US$975,800) from last quarter.
The sales from EV/ESS lithium-ion batteries was 64 billion won (US$62.5 million), a 28 percent increase from last quarter, but the operating loss came out to be 60 billion won (US$58.5 million). The shipment of PDP modules decreased by 12 percent from last quarter, and the operating losses were estimated at 28 billion won (US$27.3 million).