SK Innovation's Q1 Operating Profit Triples Amid Strong Refining Margins... Battery Losses Continue (Update)

Increase in Export Volume... Petroleum Business Operating Profit 1.5067 Trillion Won

[Asia Economy Reporter Oh Hyung-gil] SK Innovation announced on the 29th that its first-quarter sales reached 16.2615 trillion KRW, a 72.9% increase compared to the same period last year. Operating profit also rose 182.2% to 1.6491 trillion KRW.

The rise in international oil prices led to higher petroleum product prices, and the full-scale sales of electric vehicle batteries drove the sales growth.

An SK Innovation official explained, "Compared to the operating loss of around 1.7 trillion KRW recorded in the first quarter of 2020 due to the COVID-19 pandemic, this is a temporary but dramatic rebound," adding, "This reflects the impact of soaring refining margins, inventory gains from the oil business due to rising oil prices, and increased profits from oil development projects."

By business division, the petroleum business achieved sales of 10.6427 trillion KRW and operating profit of 1.5067 trillion KRW. This reflected improvements in market conditions due to strong refining margins and exchange rate increases, as well as increased inventory-related profits from rising oil prices. In particular, petroleum product export volumes increased by 57% compared to the same period last year, leading the profit improvement.

The battery business recorded sales of 1.2599 trillion KRW, 2.4 times higher than the same period last year, but incurred an operating loss of 273.4 billion KRW. Although initial operating costs were incurred for the second plant in Hungary, which began mass production, the operating loss improved by 37 billion KRW compared to the previous quarter due to a reduction in one-time expenses.

The chemical business achieved an operating profit of 31.2 billion KRW, turning to black thanks to improved paraxylene spreads and inventory-related profit effects from rising naphtha prices.

The lubricant business recorded an operating profit of 211.6 billion KRW, down 56.1 billion KRW from the previous quarter due to margin declines caused by soaring costs and decreased sales volume. The oil development business saw operating profit rise by 86.5 billion KRW from the previous quarter to 198.2 billion KRW due to increased sales prices.

The materials business posted an operating loss of 3.1 billion KRW due to a slight decrease in lithium-ion battery separator (LiBS) sales volume and increased operating costs.

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