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POSCO Chemical achieves its best-ever quarterly earnings with strong growth in cathode business
2021.07.22
On July 22, POSCO Chemical announced the second-quarter performance of 480 billion won in sales and 35.6 billion won in operating profit on a consolidated basis
Q2 2021 performance
|
100 million won |
2020 |
2021 |
YoY Increase |
QoQ Increase |
|
|
Q2 |
Q1 |
Q2 |
|||
|
Sales |
3,402 |
4,672 |
4,800 |
+41.1% |
+2.7% |
|
Operating Profit |
41 |
341 |
356 |
+773.9% |
+4.4% |
|
Operating Profit ratio |
1.2% |
7.3% |
7.4% |
+6.2%p |
+0.1%p |
*Round off to the nearest 100 million
What’s noticeable is that the sales of cathode materials in the energy materials business was up 211.7% from 53.8 billion won in the same period last year, posting 167.7 billion won, a milestone achievement for the company. Compared to the previous quarter when it recorded 154.7 billion won, the figure rose by 8.4%.
The sales for the cathode business increased as shipments of high-nickel products for EV batteries rose and the price of raw materials also increased, which was reflected in the sales price. The utility cost dropped as we adopted a mass-production system, further boosting revenue.
The sales of cathodes, which had recorded 31.2 billion won in Q2 2019, when POSCO Chemical acquired POSCO ESM, grew by 438% for eight consecutive quarters until Q2 this year.
The proportion of sales in the entire business surged from a meager 8% to 35% in the same period, making the cathode business a flagship business as the biggest contributor to corporate growth.
The anode business recorded 42.8 billion won in sales in Q2. The energy materials business, which combines cathodes and anodes, posted sales of 210.5 billion won, taking up 44% of the total sales.
The lime chemical business also saw a rise in sales and profits thanks to the increase in unit price, while sales in the refractory business dropped slightly due to decrease in sales volume as a client changed the schedule for a construction project.
The needle coke business by a POSCO Chemical subsidiary, PMC Tech, improved with heightened demand for electrode rods, which are used in electric furnaces, under the reinforced environmental regulations in China. As a result, the company achieved sales of 34.4 billion won and operating profit ratio of 29.7%.
In the future, POSCO Chemical will continue with its investment in the energy materials business in response to the growing EV market, while also enhancing its business competitiveness.
In the cathode business, the company will complete a production system with an annual output of 160,000 tons in Korea by 2025, including the 60,000-ton Pohang plant, which POSCO Chemical had announced that it would be expanding, in July this year. Overseas, the company will build more plants that will be capable of producing 110,000 tons of cathodes in the US, Europe and China, and increase the production capacity up to 270,000 tons. As for anodes, POSCO Chemical will diversify its product portfolio to include artificial graphite and silicon anodes, and expand annual output to 170,000 tons by 2025.
Moreover, the company will leverage the global network of the POSCO Group and conduct marketing activities aimed at major auto companies and battery companies around the world to increase the consumer base, while engaging in more technological partnerships, including the joint development of products.
[Reference] Sales growth of cathode materials
Total sales (Unit: 100 million won)
Cathode sales (share)