Seoul, Oct 28 (IANS) Samsung SDI Co. said on Tuesday its third-quarter net profit sharply dropped from a year earlier amid sluggish sales of electric vehicle (EV) batteries and US tariff-related factors.

Net profit came to 5.7 billion won ($4 million) over the July-September period, down 97.5 per cent from a year earlier, according to the company’s regulatory filing.

Samsung SDI added it posted an operating loss of 591.3 billion won for the third quarter, compared with a profit of 129.9 billion won a year ago. Sales fell 22.5 per cent to 3.05 trillion won.

Samsung SDI attributed the sluggish earnings to weak sales of EV batteries, coupled with Washington’s new tariff policies impacting the energy storage system (ESS) battery sector.

“Since last year, demand for EV batteries has decreased, with consumers’ demand shifting toward the entry segment,” said Kim Jong-sung, executive vice president at Samsung SDI.

“The demand for ESS has been rising in the United States, but profitability has lagged behind expectations due to tariff burdens,” he added.

The company, however, noted that despite ongoing uncertainties, it “achieved significant progress by actively promoting sales of EV and ESS batteries during the July-September period.”

Samsung SDI said it has secured “multiple supply contracts totaling over 110 Gigawatt hours (GWh) with global automotive groups,” along with other deals in a large government-led ESS supply project.

For the fourth quarter, Samsung SDI said it expects improved earnings due to a recovery in the European EV and U.S. ESS markets.

“In particular, the company plans to concentrate its capabilities on the ESS market, strengthen its presence in the EV sector, and enhance operational efficiency,” the company said.

“Samsung SDI, currently the only prismatic battery supplier among non-Chinese battery makers, expects its competitiveness in the US ESS market to further strengthen, given the growing preference for prismatic batteries due to their safety and high energy density features,” it added.

Kim noted starting next year, the demand for ESS will continue to rise on the back of the environment-friendly development drive and the rise of the artificial intelligence industry.

Despite weakened earnings performance, shares of Samsung SDI traded at 311,500 won as of 2:03 p.m., up 9.2 per cent from the previous session. The third-quarter report was released during market hours.

–IANS

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