Oct. 20 (Bloomberg) -- Samsung SDI Co., the world’s second- largest maker of lithium-ion rechargeable batteries, posted its biggest profit in five years, driven by record shipments and sales of the product and gains from its mobile-display unit.

Third-quarter net income rose 48 percent to 87 billion won ($75 million) from 58.8 billion won a year earlier, Suwon, South Korea-based Samsung SDI said in a statement today. Sales, including those of overseas affiliates, fell 9 percent to 1.35 trillion won.

Profit from rechargeable batteries will probably continue to increase in the next two years and the company will likely expand its market share until at least 2011, according to JPMorgan Chase & Co. In August, Bayerische Motoren Werke AG selected SB LiMotive Co., a venture between Robert Bosch GmbH and SDI, to make car batteries for its electric vehicles for eight years starting in 2013.

SDI was projected to report profit of 82.9 billion won on sales of 1.31 trillion won, according to the median estimate of six analysts surveyed by Bloomberg News.

Operating profit, or revenue minus the cost of goods sold and administrative expenses, rose 10 percent to 88.1 billion won, compared with the 70.7 billion won median estimate in the survey.

SDI rose 0.4 percent to 144,500 won at 1:46 p.m. on the Korea Exchange, while the benchmark Kospi stock index added 0.5 percent. The stock has more than doubled this year on higher earnings prospects from the battery and display businesses.

Record Battery Shipments

Shipments of rechargeable batteries rose 23 percent from the preceding three-month period to a record 167 million cells, SDI said. Revenue from batteries increased 15 percent to a record 574 billion won.

“We expect SDI’s rechargeable battery business to continue to be a key earnings driver for the company on the back of its ongoing market-share gain,” J.J. Park, an analyst at JPMorgan in Seoul, wrote in a report last month.

Global shipments of notebooks will increase 13 percent this year to 161 million units and rise 21 percent in 2010, according to JPMorgan estimates. Mobile-phone shipments will probably grow 13 percent to 1.47 billion units next year, according to JPMorgan.

Sanyo was the biggest maker of lithium-ion batteries in 2008, producing 725 million cells, or 21.8 percent of the market, according to a report by Institute of Information Technology Ltd. SDI was second with 515 million cells, or 15.5, percent, followed by Sony with 508 million, or 15.2 percent, based on the Tokyo-based researcher’s estimates.

Higher Demand

SDI today forecast industry demand during the fourth quarter for lithium-ion batteries, measured in terms of battery- cell shipments, will increase 12 percent from the preceding three months, led by demand for notebooks.

Gains from Samsung Mobile Display, SDI’s venture with Samsung Electronics Co. to produce organic displays and screens for mobile devices, also probably boosted SDI’s profit, according to Nomura Holdings Inc.

Sales at Samsung Mobile Display, in which SDI owns a 50 percent stake, probably rose 23 percent in the third-quarter from the preceding three months as shipments increased by an equal extent, according to James Kim, an analyst at Nomura.

Third-quarter sales of SDI’s plasma panels rose 9 percent from the previous three months to 545 billion won, while shipments gained 30 percent, the company said.

To contact the reporters on this story: Kevin Cho in Seoul at kcho2@bloomberg.net

Last Updated: October 20, 2009 00:58 EDT