SK Innovation’s Q3 Net Profit Rises Significantly Due to High Refining Margins

3 Nov 2023

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(ATTN: RECASTS throughout; ADDS photo)

SEOUL, Nov. 3 (Yonhap) — SK Innovation Co., South Korea’s leading refiner by sales, reported on Friday that its third-quarter net profit had grown substantially year-on-year due to high refining margins.

Net profit for the three months ended in September was 729.61 billion won (US$550 million), a major increase from 175.16 billion won during the same period of the previous year, the company said in a statement.

“The quarterly bottomline was bolstered by high refining margins caused by high oil prices and increased profits in the lubricant business division,” a company spokesman said.

Operating profit more than doubled to 1.56 trillion won in the third quarter from 703.96 billion won a year ago. However, sales dropped 12 percent to 19.89 trillion won from 22.75 trillion won during the cited period.

From January to September, net income decreased 76 percent to 557.22 billion won from 2.37 trillion won in the period a year ago.

“In the second quarter (of this year), the company’s refining margins decreased sharply as Russia supplied a large amount of oil at low prices in the markets. This had a negative effect on the net result for the nine-month period,” the spokesman said.

Additionally, the net result was affected by a base effect in which SK Innovation’s refining margins skyrocketed in the first and second quarters of 2022 due to the lack of oil supply caused by the Russia-Ukraine war, he said.

Operating profit fell 61 percent to 1.83 trillion won in the first nine months from 4.68 trillion won a year ago. Sales were down 2 percent to 57.76 trillion won from 58.92 trillion won.