SK On is moving to improve profitability by winning energy storage system (ESS) orders in North America and securing a lithium iron phosphate (LFP) supply chain. SK Innovation said on Wednesday its battery unit SK On posted third-quarter revenue of 1.53 trillion won and an operating loss of 80.5 billion won. Revenue fell 23.0 percent from a year earlier, while the operating loss narrowed by 44.3 billion won from 124.8 billion won.

Compared with the previous quarter, revenue fell 48.2 percent and operating profit of 821.8 billion won in the second quarter swung to a loss. That reflected a base effect as sales volumes fell and one-off gains booked in the second quarter dropped out.

The company said it is continuing to improve its earnings structure through companywide cost cuts and operational efficiency. It said underlying profitability, excluding one-off factors, is maintaining an improving trend.

SK On pointed to ESS as a key pillar of its profitability recovery. It recently signed a contract with U.S. company NeoVolta Power to supply about 9 GWh of ESS LFP pouch cells over five years from 2027.

The company forecast sales would partly recover in the fourth quarter as volumes from major customers increase. It plans to continue pursuing additional ESS orders and cutting costs. The company estimates North American ESS demand this year at 80 to 100 GWh and sees it more than doubling by 2030.

SK Innovation, the parent company, posted third-quarter consolidated revenue of 28.77 trillion won and operating profit of 3.70 trillion won. That was up 39.7 percent and 532.5 percent, respectively, from a year earlier. One-off gains in the battery business disappeared, but strong performance in its refining, lubricant and E&S businesses drove its largest-ever quarterly operating profit.