[Breaking] SK Ino, Battery Sales Surpass 1 Trillion Won for the First Time... 2Q Turns to Profit

[Asia Economy Reporter Yoonju Hwang] SK Innovation has overcome the challenges of COVID-19 and successfully turned a profit, surpassing 1 trillion KRW in operating profit for the first half of the year in three years. In particular, the battery business reduced its deficit and, for the first time, exceeded 1 trillion KRW in annual sales.

SK Innovation announced on the 4th that its operating profit for the second quarter of this year was 506.493 billion KRW, turning profitable compared to the same period last year. During the same period, sales increased by 55.9% to 11.1196 trillion KRW, and net profit turned positive at 415.8 billion KRW, according to preliminary estimates.

The battery business recorded sales of 630.2 billion KRW due to an increase in new sales volume, marking approximately an 86% increase compared to sales of 338.2 billion KRW in the same period last year, continuing its steady sales growth. Following 523.6 billion KRW in the first quarter, it achieved 630.2 billion KRW in the second quarter, surpassing 500 billion KRW for two consecutive quarters. After exceeding 100 billion KRW with 144.3 billion KRW in the fourth quarter of 2018, it recorded 600 billion KRW for the first time in the second quarter of this year.

Accordingly, SK’s battery business surpassed 1 trillion KRW in sales for the first half of the year. The annual sales exceeding 1 trillion KRW was achieved last year. Considering the growth speed of SK Innovation’s battery business, this record is expected to continue for the time being, indicating that green growth centered on batteries has begun in earnest.

The petroleum business’s operating profit decreased by 183 billion KRW from the previous quarter to 233.1 billion KRW due to a decline in refining margins and reduced inventory-related gains caused by a smaller increase in oil prices. Although demand expectations rose with the spread of COVID-19 vaccinations in the US and Europe, leading to increases in cracks for major petroleum products such as gasoline, kerosene, and diesel, the refining margin declined compared to the previous quarter due to a drop in heavy oil cracks.

The chemical business’s operating profit increased by 49.6 billion KRW from the previous quarter to 167.9 billion KRW, despite some decrease in sales volume and reduced inventory-related gains due to regular maintenance of the PX process, thanks to margin improvements such as an increase in aromatic spreads.

The lubricant business recorded an operating profit of 226.5 billion KRW, an increase of 89.4 billion KRW from the previous quarter, as margins rose sharply due to tight base oil supply conditions caused by reduced refinery operating rates. Since its spin-off as a subsidiary in 2009, the lubricant business achieved its highest quarterly operating profit ever, driving SK Innovation’s overall performance.

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