Kim Jun, SK Innovation President, "Overcoming Crisis with Differentiated DNA"

[Asia Economy Reporter Park So-yeon] Kim Jun, the CEO of SK Innovation who was reappointed as an inside director, stated that despite the demand decline caused by the spread of the novel coronavirus infection (COVID-19), the company will overcome the crisis with differentiated competitiveness.

On the 26th, at the shareholders' meeting held at the SK Building in Jongno-gu, Seoul, Kim Jun said in his greeting, "This year, the uncertainty of the business environment is expected to increase due to the global economic recession caused by the spread of the COVID-19 virus and the anticipated decrease in demand for major products."

Kim emphasized, "Since its establishment, SK Innovation has possessed a differentiated DNA that has overcome numerous difficulties and grown, and based on this, we will do our best to overcome this unprecedented crisis and take a step forward."

SK Innovation is experiencing a triple hardship due to the sharp drop in international oil prices, demand decline caused by the spread of COVID-19, and cost burdens from litigation with LG Chem. In particular, refining margins have turned negative, resulting in losses the more crude oil is refined into gasoline, and there are massive inventory asset valuation losses due to the plunge in international oil prices.

The battery sector is also facing tough conditions due to production disruptions and demand declines from global automakers. Preparations are underway for strengthened quarantine measures at European plants and potential shutdowns of operations and parts supply.

However, cautious forecasts suggest that performance will recover in the second half of the year as major refiners voluntarily cut production due to profitability deterioration. Positive factors include the order backlog for electric vehicle batteries and the normal operation of desulfurization facilities starting in March. SK Innovation's electric vehicle battery order backlog has reached approximately 50 trillion won, placing it among the 7th to 8th largest global battery companies.

An SK Innovation official said, "Although a significant temporary performance decline is expected due to the impact of COVID-19, in the mid to long term, we can say that we are steadily heading toward becoming the 'second semiconductor.' We believe that differentiated DNA ultimately comes from technology and know-how, and we will continue to invest in business."

Meanwhile, on the same day, SK Innovation approved as originally proposed the reappointment of CEO Kim Jun as inside director, the reappointment of Yoo Jung-jun as other non-executive director of SK E&S, the reappointment of Kim Jong-hoon as outside director, and partial amendments to the articles of incorporation.

The partial amendment to the articles of incorporation, which reflects the establishment of the SK Management System that incorporates the happiness of members and stakeholders into management philosophy and the establishment and operation of a member education system, was passed. Additionally, proposals such as amendments to retirement pay regulations due to the integration of executive grades, stock option plans, and director remuneration limits were also approved as originally proposed.

This content was produced with the assistance of AI translation services.