SK Innovation’s battery business (SK On) has managed to turn a profit on the EBITDA basis for the first time. EBITDA stands for earnings before interest, taxes, depreciation and amortization. The turnaround was driven by an improvement in the yields of new plants that have recently started operating.
SK Innovation announced on Nov. 3 that its battery business posted 2,194.2 billion won in sales in the third quarter, a 168.6 percent increase from the same period of 2021. Compared to the previous quarter, its sales grew by 70.3 percent.
SK On’s battery production capacity increased from 20GWh in 2020 to 40GWh in 2021 and 77GWh in 2022. Sales also increased from 1.61 trillion won in 2020, 3.39.8 trillion won in 2021, and 4.74 trillion won in the first to third quarters of 2022. The company’s operating loss in the third quarter was 134.6 billion, much smaller than the previous quarter’s 326.6 billion won. It posted 9.4 billion won in EBITDA, the first quarterly.
The turnaround was attributable to sales growth based on stable operations of the new plants. Plant 1 in the United States and Plant 2 in Hungary suffered difficulties in achieving desired initial yields, but succeeded in ramping up production before starting mass production. In addition, the selling price hiked due to a rise in raw material prices.
Financing is back on track now. SK On initially planned to complete pre-IPO investment attraction by the first half of this year, but had difficulties in attracting investors due to a worsening global economy.