South Korea's SK Innovation had a challenging first half of the year with decreasing revenues and high net losses.
The company is mostly focused on its Refining, Potrochem and Lubricants divisions, which are responsible for more than 90% of revenues:
- sales: 7,199.6 billion KRW ($6.05 billion), down 45% year-over-year
- operating profits: -439.7 billion KRW ($370 million)
- pre-tax income: -480.4 billion KRW ($400 million)
The category named "Other", which includes electric vehicle batteries and battery materials, is actually a small part of the entire company (6.2% of revenues).
- sales: 447.9 billion KRW ($380 million)
- operating profits: -124.2 billion KRW ($100 million)
- pre-tax income: -125.9 billion KRW ($110 million)
The EV battery business is a way of diversifying from oil. This part of the company is expanding fast with new manufacturing plants under construction on three continents simultaneously.
However, EV battery sales remain unprofitable with operating losses of 113.8 billion KRW ($96 million) in Q2.
On the other hand, the EV battery material division is doing quite well, as operating profits increased in Q2 to 43.7 billion KRW ($37 million).
SK Innovation is a small player in the EV battery market, but with a plan to expand its manufacturing capacity to 60 GWh in 2022 and 100 GWh around 2025 it will be one of the biggest suppliers.