A financial report for Chinese battery giant CATL released on October 10 showed that its net profits for the third quarter of this year are expected to total between 8.8 billion and 9.8 billion yuan ($1.22 billion – $1.36 billion), up 169% to 199% year-on-year. The figure would be more than the 8.18 billion yuan earned in the fourth quarter of last year and another record quarterly profit for the company.
CATL’s share price on October 10 fell below 400 yuan for the first time since May. It closed at 392.86 yuan per share, down 2% year-on-year. On October 11, the stock price increased by 2.84%, back to over 400 yuan.
In the first three quarters of this year, CATL expects a maximum net profit of 18 billion yuan, an increase of 132% over the same period last year. CATL said that it has strengthened market development efforts to achieve rapid growth in profit scale.
CATL’s battery capacity in the first half of the year was 154 GWh, with more than 100 GWh of capacity under construction. The company currently has 13 battery production bases located in China, such as Ningde in Fujian Province, Liyang in Jiangsu Province, and Yibin in Sichuan Province, as well as two overseas factories in Germany and Hungary.
At an investor briefing held last month, CATL revealed that in the third quarter of this year, due to the adjustment of the battery system prices, the increase in capacity utilization rate and the implementation of cost reduction measures, the gross profit margin of the power battery segment will be slightly higher than that in the first half of the year.
In the first quarter of this year, CATL’s net profit was 1.49 billion yuan, down 23%, which was the second time the company’s first-quarter performance declined since its listing. One of the main reasons was the rapid rise in raw material prices, with costs roughly tripling in the quarter.
In late March, CATL announced that it had adjusted the prices of some battery products. Lithium carbonate is one of the main raw materials needed to produce batteries. Since the beginning of this year, the price of lithium carbonate has continued to remain high, and the current highest price has exceeded 520,000 yuan per ton, a record high.
Statistics released by South Korea-based SNE Research this month showed that in the first eight months of this year, the cumulative installed capacity of CATL reached 102.2 GWh, exceeding the 96.7 GWh recorded last year. In the first eight months of this year, CATL’s share in the global power battery market was 35.5%, an increase of 5.9% from the same period last year.
CATL is now accelerating its layout in the European market. It plans to build a new energy battery industrial base project in Debrecen, Hungary, with a total investment of no more than 7.34 billion euros, far exceeding its factory in Germany, which started in 2019 with investment totaling 1.8 billion euros.
In the first three quarters of 2022, battery giants such as CATL and EVE Energy accelerated efforts to develop mining operations and overcome raw material supply challenges. EVE Energy expected that the net profit attributable to the parent company in the third quarter of 2022 will increase by 50% to 80% year-on-year. The two firms have also both won large battery orders from BMW Group.