SK Innovation 2020: Battery Business Grew More Than Twice Compared To 2019.
On January 29, SK Innovation said its battery business set a new revenue record, which has surpassed a trillion Korean won for the first time in its announcement of financial results for last year, despite decline in its other key business areas due to the impact of COVID-19. SK Innovation’s battery business revenue last year was 1.61 trillion won, more than doubling from the previous year’s revenue of 690.3 billion won.
SK Innovation recorded sales of 7.6776 trillion won and operating loss of 243.4 billion won in the 4th quarter of 2020. The battery business also recorded its highest quarterly revenue of 479.2 billion won. Annual sales were 34.1645 trillion won and operating loss were 2.5688 trillion won.
SK Innovation’s battery business is expected to continue to grow as its factories at Yancheng and Huizhou in China with an additional 20GWh production are in full operation this year, bringing up the total capacity to 40Gwh, which is 4 times larger compared to capacity at the end of 2019.
Battery and material business
SK Innovation’s battery business is leading the company’s green growth. It is on a full-fledged growth track with annual sales of 1.61 trillion won, an increase of 919.9 billion won from the previous year’s annual sales (690.3 billion won).
Battery sales increased sharply due to stable operation of the first plant in Hungary and Changzhou plant in China, which began mass production in 2020. The early stabilization of overseas factories helped the company’s battery sales increase and improve profitability.
SK Innovation’s battery plants in Yancheng and Huizhou are scheduled to start mass production in the first quarter of 2021, which is expected to improve financial results of the company greatly in the future.
Besides, the second battery plant with capacity of 9.8GWh and the third plant in Hungary will begin their mass production in the first quarter of 2022 and the first quarter of 2024 respectively.
In Georgia, the U.S., SK Innovation’s first battery plant with capacity of 9.8GWh and the second plant with capacity of 11.7GWh will start mass producing in the first quarter of 2022 and the first quarter of 2023 respectively.
SK Innovation is targeting to have annual battery production capacity of 85GWh by 2023 and 125GWh by 2025. The company decided to increase the annual capacity by more than 25GWh by 2025 compared to its original target of 100GWh, making aggressive investments in the business to keep up with rapid growth of EVs.
The material business has been expanding its separators facilities as well. Currently, the 530 million m2 plant in Cheongju and Jeungpyeong, Korea and the 340 million m2 plant in China have been operating since the end of last year and providing annual production capacity of 870 million m2.
When overseas factories such as China and Poland’s are put into operation sequentially, the total capacity is expected to reach 1.37 billion m2 by the end of this year and 1.87 billion m2 by 2023.
Meanwhile, SK Innovation decided not to pay dividends in 2020 due to decreased financial results brought by COVID-19 and increased investments in its new business. Still, the company said it is developing a plan to return to its shareholders in the mid- and long-term based on its business performance and corporate values created by its new business since shareholder value is of prime importance for the management of the company.
President & CEO of SK Innovation Kim Jun:
Facing unprecedented business environment due to COVID-19, SK Innovation’s business performance showed substantial outcomes resulted from its new business for growth
“This year is the first year to begin the company’s financial story and we are also focused on adopting green business models in our existing business as well as new business while promoting breakthrough innovation”
SK Innovation’s 2020 Financial Results: Battery business grew more than twice compared to the previous year despite overall decline in business performance, January 29, 2021
