SEOUL, Nov. 3 (Yonhap) — SK Innovation Co., South Korea’s top refiner by sales, reported that their third-quarter net profit skyrocketed from the same period of the previous year, due to high refining margins. The net income for the three months ended in September increased to 729.61 billion won (US$550 million), a dramatic jump from 175.16 billion won in the same quarter of 2020. A company spokesman said that the quarterly bottomline was boosted by high refining margins driven by high oil prices and improved profits in the lubricant business division.
Operating profit more than doubled to 1.56 trillion won in the third quarter from 703.96 billion won a year ago, while sales fell 12 percent to 19.89 trillion won from 22.75 trillion won during the cited period. SK Innovation predicted that its refining business will continue to grow in the fourth quarter due to low inventory levels, recovering demand from China and a tight supply in the markets. However, the company expected lower profitability from SK On, its wholly owned battery manufacturing unit, due to low battery material prices and slowing demand for electric vehicles.
From January to September, net income plummeted 76 percent to 557.22 billion won from 2.37 trillion won in the same period of 2021. This was largely due to a base effect from SK Innovation’s refining margins increasing in the first and second quarters of 2022, due to the Russia-Ukraine war. Operating profit decreased 61 percent to 1.83 trillion won in the first nine months from 4.68 trillion won a year ago, while sales dropped 2 percent to 57.76 trillion won from 58.92 trillion won.
SK IE Technology Co. (SKIET), the country’s leading lithium-ion battery separator maker, also reported a widened net loss in the third quarter due to weak demand for EVs and higher costs in building separator plants in Poland. SKIET’s net loss in the September quarter deepened to 30.69 billion won from 24.95 billion won a year ago. The company has recently completed one of four separator plants in Poland, with the second plant under construction and two others yet to be built.
SK Innovation’s shares rose 7.5 percent to 137,100 won, and SKIET also gained 7 percent to 67,100 won, outperforming the broader KOSPI’s 1.08 percent gains.