EcoPro BM protects quarterly profit as grid energy storage sales surge

EcoPro BM reported Nov. 5 that surging shipments of energy storage cathodes offset slumping electric vehicle orders, preserving an operating profit of 12.0 billion won ($8.7 million) in the third quarter.

The Cheongju-based supplier said consolidated quarterly revenue slipped 3.3% from the prior quarter to 557.9 billion won ($405.0 million), down 10.7% from a year earlier. Operating profit fell 33.3% sequentially and 76.2% year-on-year.

Deliveries of cathode active materials for energy storage systems (ESS) jumped 173.3% quarter-on-quarter to 123.6 billion won ($89.8 million), accounting for 22.2% of total corporate revenue.

Demand for electric vehicle cathodes fell sharply over the same period. Sales in the passenger car division dropped 34% sequentially to 256.1 billion won ($186.0 million), representing 45.9% of company revenue.

North American electric vehicle sales growth slowed throughout the summer. Automakers in Europe simultaneously curtailed battery procurement to work through unsold vehicle inventory, the company said in a regulatory filing.

Sales in the power applications unit rose 16% quarter-on-quarter to 169.7 billion won ($123.3 million). The segment, which supplies cells for power tools and data center backup units, expanded 50% from a year earlier.

Demand for power application cathodes also drew support from semiconductor fabrication projects and high-output industrial tools. EcoPro BM is widening cathode supply for server battery backup units, robotics and industrial machinery to cushion passenger vehicle cyclicality.

The manufacturer posted a net loss of 1.8 billion won ($1.3 million) for the quarter, swinging from positive territory. Foreign exchange movements and temporary factory disruptions weighed on the final balance, the company said.

Operating income remained positive for the seventh consecutive quarter despite the contraction in passenger vehicle battery installations. Material suppliers across South Korea have confronted similar volume reductions at Western automotive assembly plants.

Booming construction of artificial intelligence data centers drove the rebound in stationary storage orders. Utility operators and technology developers increased grid-scale storage purchases to maintain stable power delivery around compute clusters.

The company is adjusting its chemical portfolio in response to utility procurement patterns. EcoPro BM historically specialized in high-nickel nickel-cobalt-manganese (NCM) chemistries, but management is now accelerating investments in lithium iron phosphate (LFP) production.

High-nickel cathodes provide superior energy density for long-range vehicles, but utility battery installations prioritize cyclic durability and raw material cost. Lithium iron phosphate formulations avoid cobalt and expensive nickel, offering cheaper thermal stability for large containerized battery banks.

Management is negotiating an annual supply contract for 4,000 metric tons of LFP cathode materials with an overseas client. The planned volume targets grid installations across North America seeking alternatives to Chinese supply chains.

The company is reviewing plans to build up to 50,000 metric tons of dedicated LFP cathode manufacturing capacity. The expansion would directly contest market share held by dominant suppliers in mainland China, the company said.

Local manufacturing in Europe resumed following regulatory clearances in Hungary. EcoPro BM restarted two cathode lines at its Debrecen plant in late October after Hungarian safety authorities completed on-site reviews.

The Debrecen site positions the company ahead of European Union domestic sourcing standards that tighten in 2027. Localized production allows European automakers to qualify for regional battery subsidies while avoiding long maritime supply chains.

EcoPro BM intends to raise European production to 30,000 metric tons next year. The restart eliminates temporary operational bottlenecks, though one-off maintenance expenses were booked against third-quarter earnings, the company said.

Upstream mineral processing represents the second pillar of the cost-reduction strategy. EcoPro BM completed equity investments in the PT Vale Indonesia and BNSI nickel smelting project in Indonesia, securing refined metal inputs.

Trial operations at the Indonesian nickel processing facility begin late this year, with commercial operation scheduled for the first half of 2027. The project integrates nickel refining directly with South Korean precursor and cathode plants.

"We maintained operating profits by responding quickly to surging grid and power infrastructure demand while electric vehicle sales slowed," Chief Executive Song Ho-jun said in the release.

Management expects stationary storage and power application cathode deliveries to remain firm through the fourth quarter. The electric vehicle division will face prolonged stagnation as North American consumer subsidies expire and European carmakers alter launch schedules.

The regulatory filing did not disclose the North American counterparty negotiating the 4,000-metric-ton supply contract, and the company has not published contract pricing terms.

The Debrecen plant will expand output to commercial run-rates in the fourth quarter, followed by the formal commissioning of the Indonesian smelter in early 2027.