Samsung SDI (006400) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was KRW 3.2 trillion, up 5.1% sequentially but down 22% year-over-year, with a net loss of KRW 167 billion due to weak demand and external headwinds; H1 2025 revenue was KRW 6,356.2 billion, down 28.6% YoY, with an operating loss of KRW 831.9 billion.

• Battery business revenue in Q2 was KRW 2.96 trillion, down 1% sequentially and 24% YoY, with an operating loss of KRW 431 billion; small battery losses narrowed, and electronic materials saw improved sales and profitability.

• Management expects gradual earnings improvement in H2, targeting a Q4 profit turnaround, driven by recovery in small battery and electronic materials segments.

• Major strategic actions included a capital increase, divestiture of the polarizer film business, and new joint ventures in the US.

• Net income margin was -5.2% in Q2 2025, compared to 6.5% in Q2 2024.

Financial highlights

• Q2 operating income was a loss of KRW 398 billion; pre-tax loss was KRW 341 billion; EBITDA rose to KRW 114 billion in Q2 2025, up 71.8% sequentially.

• Assets increased to KRW 41.4 trillion, up KRW 727 billion from Q1; equity rose to KRW 22.7 trillion, up KRW 1.1 trillion, both due to capital increases.

• Q2 CapEx was KRW 1.1 trillion, with H1 2025 cumulative total of KRW 1.8 trillion.

• Cash and cash equivalents increased to KRW 2,154 billion in Q2 2025.

• Gross margin improved to 8.8% in Q2 2025 from 6.4% in Q1 2025, but remains below 22.6% in Q2 2024.

Outlook and guidance

• Gradual sales and earnings recovery expected in H2, with a Q4 profit turnaround anticipated, especially in small battery and electronic materials.

• No cash dividends planned for 2025–2027 due to negative free cash flow and ongoing investment.

• Strategies include efficient line operation, expanding orders in entry segments, and launching new battery products.

• Management expects continued investment in battery capacity and R&D, focusing on long-term growth in EV and ESS markets.

• Mid to large battery losses expected to narrow due to increased shipments and compensation for delayed EV battery orders; U.S. tariffs remain a profitability risk.