Shanghai (Gasgoo)- In the first half of 2024, Chinese power battery giant CATL achieved a revenue of 166.767 billion yuan, representing an 11.88% year-on-year dip, according to its semi-annual financial results issued a few days ago. Despite this, the company reported a net profit attributable to shareholders of 22.865 billion yuan, marking a 10.37% increase. The basic earnings per share stood at 5.2017 yuan during this period.
It's notable that CATL's revenue in both the first and second quarters (Q1 and Q2) did not surpass 100 billion yuan, experiencing double-digit year-on-year declines. Specifically, the company reported 79.77 billion yuan in Q1 revenue, down 10.41% year-on-year, and 86.9 billion yuan in Q2, a 13.1% year-on-year decline.
While CATL did not disclose detailed reasons for the revenue decline, the financial report indicates it is related to the performance of its power battery sector and overseas markets.
CATL's main business segments include power batteries, energy storage batteries, battery materials and recycling, and battery mineral resources. The report shows that in the first half of this year, revenue from power battery systems was 112.6 billion yuan, down 19% year-on-year, accounting for 67% of the total revenue.
Geographically, CATL's domestic revenue was 116.2 billion yuan in the first half of this year, while overseas revenue was 50.53 billion yuan. Comparatively, in the same period last year, domestic revenue was 114.4 billion yuan, and overseas revenue was 65.68 billion yuan. This means that while domestic revenue remained relatively flat, overseas revenue fell by more than 15 billion yuan, a 24.77% year-on-year decrease.
Despite the sharp drop in overseas revenue, CATL continued to rank first globally in power battery installations for the first five months of 2024, with 107 GWh installed and a market share of 37.5%, according to According to South Korean research firm SNE Research. In China’s power battery market, CATL's market share in the first half of 2024 increased to 46.4%, up 3 percentage points year-on-year, according to data by the China Automotive Power Battery Industry Innovation Alliance (CAPBIIA).
While revenue declined, CATL's net profit still grew. In Q1, the company reported a net profit attributable to shareholders of 10.51 billion yuan, a 7% year-on-year increase, and 12.36 billion yuan in Q2, a 13.4% year-on-year rise and 17.56% quarter-on-quarter increase. The profit increase against revenue decline is attributed to the rapid drop in raw material costs for power batteries and CATL's ongoing cost-control strategies.
As the major component of cells, the average price of battery-grade lithium carbonate has decreased from about 100,000 yuan per tonne at the beginning of the year to around 85,000 yuan per tonne recently, down from nearly 600,000 yuan per tonne at the peak in 2022 due to high demand.
Additionally, according to a Guosen Securities report on July 12, the price of prismatic lithium iron phosphate power cells has dropped by 4.65% since the beginning of the year, a 36.92% decline over the year-ago period.
Due to these price effects, CATL's revenue from its power battery system business in the first half of 2024 fell by 19.2% year-on-year, while operating costs dropped even more sharply by 25.84%, raising the gross profit margin of power batteries by 6.55 percentage points to 26.9%. The gross profit margin for energy storage battery systems also increased to 28.87%, up 7.55 percentage points year-on-year. In contrast, during the lithium carbonate price surge in 2022, the gross profit margins for both power battery system and energy storage battery system had dropped to around 17%.
CATL stated in a recent earnings call that its unit profit per watt-hour (Wh) remained stable at 0.19-0.2 yuan/Wh in Q2. As the prices of lithium carbonate and other raw materials decline, product unit sales prices have also dropped, thus increasing gross profit margins.
The company's cost-control strategy also includes reduced capital expenditures and delayed construction of fundraising projects. In the first half of this year, CATL's capital expenditure was approximately 13.8 billion yuan, continuing a downward trend, with construction in progress at about 27.25 billion yuan, down 16.5% year-on-year, and fixed assets around 113.1 billion yuan, showing a rare decline.
On July 26, CATL announced a significant delay in the expected completion date of the Phase I Lithium-Ion Battery Production Project in Guangdong Ruiqing CATL from the original June 1, 2024, to December 31, 2026.
