(ATTN: UPDATES with more details)
By Kim Seung-yeon
SEOUL, July 24 (Yonhap) — POSCO Future M Co. reported Monday that its second-quarter operating profit decreased 5.6 percent from the same period a year earlier, while announcing a plan to invest over 680 billion won (US$529 million) to expand its cathode production facility for electric vehicle (EV) batteries.
Operating income totaled 52.1 billion won in the April-June period, compared with 55.2 billion won in the same period of the prior year, the chemical unit of South Korea’s POSCO Holdings Inc. said in a regulatory filing.
Sales rose 48.5 percent year-on-year to 1.19 trillion won. Net income was 43.1 billion won, down 7.1 percent year-on-year.
POSCO Future M stated in a separate filing that it will invest 683.4 billion won to construct a facility to manufacture high-nickel cathodes, one of the four components of EV batteries, together with anodes, separators and electrolytes.
Cathodes determine the power and range of EV battery cells and account for more than 40 percent of a cell’s production cost.
The facility will be constructed in its main cathode complex in Gwangyang, located about 300 kilometers southwest of Seoul, with an annual capacity to produce 52,000 tons of cathodes comprising lithium, nickel, cobalt and aluminum (NCA).
POSCO Future M is accelerating its focus on the battery materials sector as part of its shift to green energy.
It provides cathodes to Samsung SDI Co., LG Energy Solution Ltd. (LGES) and Ultium Cells LLC., the U.S. joint venture between LGES and General Motors Co.
POSCO Future M currently has a backlog of orders worth 106 trillion won.
In the second quarter, the battery materials segment recorded 37.5 billion won in operating profit on sales of 842.5 billion won, with the sales of cathodes accounting for the majority of the sectoral revenue.
Anode sales reached 56.2 billion won.
Basic chemical materials, such as refractories and burned lime, posted an operating profit of 14.6 billion won, with sales amounting to 350.5 billion won.