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Ecopro |
[Alpha Biz= Paul Lee] EcoPro, the holding company of EcoPro Group, announced on Tuesday that it recorded consolidated revenue of 3.11 trillion won and an operating loss of 314.5 billion won for the previous year. This represents a 57.2% drop in revenue compared to the previous year, resulting in a shift from operating profit to loss.
Notably, EcoPro's cost of sales last year amounted to 3.2 trillion won, which was higher than its revenue. This indicates that the company faced losses as it continued to sell its products.
EcoPro's profitability worsened throughout the year, with operating losses increasing each quarter:
Q1: -29.8 billion won
Q2: -54.6 billion won
Q3: -108.8 billion won
Q4: -121.3 billion won
The larger operating loss in Q4 is attributed to problematic inventory, according to the company. It explained that while the profitability of its listed subsidiaries improved, the recognition of 82.6 billion won in inventory asset impairment charges at its unlisted subsidiaries (EcoPro CNG and EcoPro Innovation) contributed to the increased operating loss.
The overall industry environment also worsened. The growth rate of electric vehicles (EVs) slowed. According to SNE Research, the EV sales growth rate peaked at 109% in 2021 but decreased to 56.9% in 2022, 32.5% in 2023, and 25.9% in 2024 (as of November).
Profitability also deteriorated due to "rear-lagging," meaning the company bought raw materials like lithium at high prices but sold finished products like cathode materials at lower prices. Typically, cathode material companies and battery manufacturers set product prices based on metal prices at the time of sale. In the second half of the year, lithium prices fell by around 30% compared to the beginning of the year.
The performance of its key subsidiaries was also poor. Operating losses included:
EcoPro BM (cathode material production): 40.2 billion won
EcoPro Materials (precursor production): 63 billion won
EcoPro HN, an eco-friendly total solutions company, reported an operating profit of 24.2 billion won, but this was a 42.1% decrease from the previous year. While it was the only major subsidiary to achieve an annual profit, it was insufficient to offset the 300 billion won in losses.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
