Seoul, Oct 28 (NationPress) Samsung SDI Co. announced on Tuesday that its net profit for the third quarter has significantly declined compared to last year, driven by lackluster sales of electric vehicle (EV) batteries and the effects of US tariff policies.

The net profit stood at 5.7 billion won (approximately $4 million) during the July-September timeframe, reflecting a dramatic 97.5 percent drop from the previous year, according to the company's regulatory submission.

Additionally, Samsung SDI reported an operating loss of 591.3 billion won for the third quarter, in contrast to a profit of 129.9 billion won from the same period last year. Sales experienced a 22.5 percent decline, totaling 3.05 trillion won.

The company attributed the disappointing earnings to weak demand for EV batteries, along with new tariff regulations from Washington that have affected the energy storage system (ESS) battery sector.

According to Kim Jong-sung, executive vice president at Samsung SDI, "Since last year, there has been a decrease in demand for EV batteries, with consumers shifting their focus towards the entry-level segment."

He further noted, "While demand for ESS in the United States has been increasing, profitability has not met expectations due to the burden of tariffs."

Despite the challenging environment, Samsung SDI highlighted that it has made significant strides by actively boosting sales of both EV and ESS batteries during the third quarter.

The company reported securing multiple supply contracts totaling over 110 Gigawatt hours (GWh) with various global automotive groups, as well as participating in a major government-led ESS supply initiative.

Looking ahead to the fourth quarter, Samsung SDI anticipates improved financial performance due to a recovery in both the European EV and U.S. ESS markets.

"In particular, the company intends to focus its resources on the ESS market, bolster its position in the EV sector, and enhance operational efficiency," the company stated.

Samsung SDI, which is currently the only prismatic battery supplier among non-Chinese battery manufacturers, believes its competitiveness in the US ESS market will strengthen further, given the growing preference for prismatic batteries due to their safety and high energy density.

Kim predicted that starting next year, the demand for ESS will continue to grow, driven by environmentally friendly development initiatives and the expansion of the artificial intelligence industry.

Despite the downturn in earnings, shares of Samsung SDI were trading at 311,500 won at 2:03 p.m., marking a 9.2 percent increase from the previous session. The third-quarter results were announced during market hours.