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POSCO Chemical posts record-high sales thanks to the strong growth of its battery materials business
2023.01.27
- Battery materials have accounted for a majority of all sales for the first time at 58.7%, visibly demonstrating investment results.
- Having begun supplying battery materials to fulfill a 13 trillion KRW supply contract it won earlier this year, POSCO Chemical plans to accelerate the growth of its business by pursuing additional large-scale contracts.
Thanks to the growth of its battery materials business, POSCO Chemical has achieved the highest level of business performance since its foundation, exceeding 3 trillion KRW in annual sales.
On the 27th, POSCO Chemical published its financial results for 2022, which showed consolidated sales of 3,301.9 billion KRW and an operating profit of 165.9 billion KRW. POSCO Chemical’s sales and operating profit increased 66.0% and 36.3% YoY, respectively, and the company's operating margin reached 5.0%.
With regard to its battery materials business, sales rose by 127.6% from the previous year to 1,938.3 billion KRW, driven by increases in sales volume and sales price due to increased demand for electric vehicle batteries and new orders landed for energy storage systems (ESS), and operating profit increased 287.1% YoY to 150.2 billion KRW, which equates to an operating margin of 7.7%.
Battery materials accounted for a majority of all sales for the first time in POSCO Chemical history, at 58.7%, visibly demonstrating investment results as well as solidifying their position as the company's flagship business. Among the battery materials, the sales of cathodes more than doubled, buttressing the business’s explosive growth.
In regards to the basic materials business, sales increased 19.8% YoY to 1,363.6 billion KRW thanks to rises in the sales prices of products, in the first half, including refractories, lime, coal tar and crude light oil. However, operating profit amounted only to 15.7 billion KRW, equivalent to an operating profit margin of 1.2%, proving to be less than in the previous year due to a decrease in the operation rate resulting from the typhoon flooding in Pohang and a weak oil price in the second half of the year.
POSCO MC Materials (formerly PMC TECH), a POSCO subsidiary that produces needle cokes, a value-added product used for artificial graphite anodes and electrodes, recorded sales of 252.2 billion KRW and an operating profit of 39.2 billion KRW, showing stable performance. In addition, PNO Chemical, another POSCO subsidiary which produces industrial hydrogen peroxide for high-tech uses, including semiconductor etching, has been operating normally since being launched this past October.
POSCO Chemical expects its battery materials business to continue to grow this year on the strength of the expansion of battery material production and sales.
POSCO Chemical's cathode production plant in Gwangyang, the largest of its kind in the world with an annual capacity of 90,000 tons comprehensively completed last year, will start full-scale operations this year, and its Pohang cathode phase 1 plant, which is currently under construction, is also scheduled to be completed within the year, with an annual capacity of 30,000 tons. Its high-nickel cathode production plant, which is currently being built in Quebec, Canada in cooperation with General Motors, is scheduled to be completed next year, with the company’s ongoing efforts to expand its global production capacity, which are for its entry into major international markets, such as North America, Europe, and China together with leading global electric vehicle companies, expected to bear fruit soon.
In terms of sales, earlier this year, POSCO Chemical begun supplying the first batch of deliverables for a 13,769.7 billion KRW supply contract for high-nickel cathodes signed last year with Ultium Cells, a joint venture between GM and LG Energy Solutions, which is expected to be the principal driving force for the company's sales expansion. POSCO Chemical is currently negotiating with a number of partners for joint development and supply of products and plans to sign large-scale sales contracts within this year, which is expected to further accelerate its growth.
■ POSCO Chemical's business performance for 2022 (on consolidated basis)
(Unit: 100 million KRW)
|
2022 |
2021 |
Year-on-year growth rate |
|
|
Turnover |
33,019 |
19,895 |
66.0% |
|
Operating profit |
1,659 |
1,217 |
36.3% |
|
Net income |
1,219 |
1,338 |
△8.8% |