The Ford F-150 Lightning equipped with SK On’s battery (File photo downloaded from Ford Motor website)
SK On Co., the world’s fifth-largest battery maker, on Thursday reported a record quarterly loss on the prolonged weakness in the electric vehicle industry although the South Korean company reiterated its goal of a turnaround in the second half.
SK On said its operating loss more than tripled to 460.1 billion won ($336.5 million) in the second quarter from the 131.5 billion won deficit a year earlier as sales more than halved to 1.6 trillion won from 3.7 trillion won. The company has been in the red for the 11th straight quarter.
The battery supplier to Hyundai Motor Co. and Ford Motor Co. earned 111.9 billion won from the US advanced manufacturing production credit (AMPC) in the April-June 2024 period while the operating loss a year ago reflected the tax benefits of 167 billion won for the first half of 2023.
Under the AMPC program, eligible battery makers can receive tax benefits, including a $35 tax credit per 1 kilowatt-hour produced by a battery cell and a $10 tax credit per 1 kWh battery module manufactured in North America.
SK On said the quarterly loss increased as it cut runs of factories worldwide and spent more for commercial operations of a new plant in Hungary.
TURNAROUND IN H2
The company to be merged with other units of South Korea’s No. 2 conglomerate SK Group such as SK Trading International Co. in November aims to make a profit from the battery business in the second half although the global EV industry remained sluggish. Its key customer Ford cut investments in electrification.
“Sales of the Ford F-150 Lightning pickup kept growing,” said an SK On official.
“We are in talks with multiple global automakers in addition to the existing clients for new supply deals,” the official said. “We are also discussing with customers to supply prismatic batteries we developed.”
SK On’s parent SK Innovation Co. expected battery demand to increase thanks to new EV models in the second half.
SK Innovation’s refining and petrochemical complex in Ulsan, South Korea (File photo)
SK INNOVATION NARROWS LOSS
SK Innovation, South Korea’s top energy company, said its operating loss more than halved to 45.8 billion won in the second quarter on a consolidated basis from the 106.8 billion won deficit a year earlier. Sales edged up 18.8 trillion won.
The operator of the country’s largest refinery reported operating profits in the previous three straight quarters.
Lower crack spreads — differentials between prices of crude oil and petroleum products – hurt refining margins on quarter, while profits from the petrochemical, lubricants and oil exploration and production business slid, according to the company.
By Hyung-Kyu Kim and Woo-Sub Kim
khk@hankyung.com
Jongwoo Cheon edited this article.
