Battery Business Expected to Turn a Profit Next Year
SK Innovation announced on Oct. 29 that the order backlog of its electric vehicle battery business, which was recently spun off into SK On, amounts to 220 trillion won.
The company disclosed the figure during a third-quarter earnings conference call. It posted an operating profit of 618.5 billion won on sales of 12.3 trillion won in the third quarter of 2021. The operating profit increased 672.2 billion won year on year while sales rose by 48.1 perfect on year.
The main driver of profit growth was the lubricating oil business, which posted 329.3 billion won in operating profit, a quarterly high. It accounted for 53 perfect of SK Innovation's total operating profit. This result is attributable to a rise in margins thanks to improved market conditions and increased sales in the United States and Europe.
During the conference call, Yoon Hyung-jo, vice president of SK Innovation's Battery Planning Office, specifically disclosed the company’s battery order backlog. "Following the recent establishment of a joint venture with Ford, our order backlog has increased to around 1.6 terawatt hours (TWh)," Yoon said. "Its value is estimated at 220 trillion won."
SK Innovation said that cumulative sales of batteries would reach 3 trillion won in 2021. The company expects that the first U.S. plant and the second European plant will start volume production next year, boosting annual battery sales to the mid-6 trillion won range. It expects the battery business to turn a profit next year.
Its operating profit in the oil business sector reached 290.6 billion won, up 57.5 billion won from the previous quarter, on the back of improved margins. On the other hand, the chemical business saw its operating profit fall by 83.5 billion won from the previous quarter to 84.4 billion won due to a spike in power costs caused by rising oil prices.