W-Scope Chungju Plant (393890) Q3 2024 earnings summary

Executive summary

• Revenue for 3Q24 was KRW 65.5bn, down 51.1bn sequentially and up 3.9bn year-over-year.

• Net profit was -21.0bn (-32.1%), a significant deterioration from 3.4bn in 2Q24 and 14.9bn in 3Q23.

• Manufactures and sells separators for lithium-ion batteries, focusing on wet and ceramic-coated separators for EVs and ESS applications.

• Expanded production capacity with new lines in Korea and Hungary, targeting global EV market growth.

• Significant investments in R&D and production expansion, with a focus on cost reduction and technology leadership.

Financial highlights

• Gross profit margin fell to -22.4% from 5.7% in 2Q24 and 21.6% in 3Q23.

• Revenue: ₩304.5 billion for 2024 Q3 YTD, nearly unchanged from ₩305.0 billion in 2023.

• Operating loss: ₩17.0 billion, compared to an operating profit of ₩46.4 billion in 2023.

• Cash and equivalents: ₩19.3 billion at Q3 2024, down from ₩87.5 billion at 2023 year-end.

• Total assets: ₩1.64 trillion; total liabilities: ₩642.2 billion; equity: ₩999.5 billion.

Outlook and guidance

• Prismatic battery segment pressured by main customer inventory control; 2170 segment affected by weak US OEM sales.

• 4Q24 forecast includes completing supply for main buyer and ongoing disruptions in US OEM sales.

• Anticipates continued global EV separator demand growth, especially in North America and Europe.

• Plans to complete Hungary plant and expand production to 2.3 billion m² by 2025.

• Focus on cost reduction, technology innovation, and customer diversification to maintain competitiveness.