SK Group Chairman Chey Tae-won speaks during a ceremony to mark the 60th anniversary of SK Innovation Co. at the Korea Chamber of Commerce and Industry in Seoul on Oct. 13, 2022, in this photo provided by the company.
SEOUL, Nov. 3 (Korea Bizwire) – SK Innovation Co. said Thursday its third-quarter net profit sank 65.5 percent from a year earlier on narrowing refinery margins amid a fall in global oil prices.
Net income reached 175.2 billion won (US$122.7 million), compared with 507.1 billion won the previous year, the refinery and energy unit of SK Group said in a regulatory filing.
Operating profit grew 5.3 percent on-year to 704 billion won for the July-September period. Revenue rose 82.5 percent to 22.75 trillion won in the same period.
The earnings fell behind market expectations. The average estimate of net profit by analysts stood at 194.9 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
“The operating profit steeply declined from the previous quarter due to the impact from a fall in oil prices and refining margins amid global recession concerns,” SK Innovation said.
Increases in the petroleum distillation operation and improved production capability of new battery plants contributed to the revenue hike, the company said.
Petroleum distillation, also known as the crude distillation unit (CDU), refers to the first processing unit of the petroleum refinery that separates crude oil into different fractions of oil, such as naphtha, kerosene, diesel and paraxylene.
The refining margin is forecast to recover due to the rise in seasonal demand for heating fuel and others expected for winter, SK Innovation said.
SK On Co., its battery-making subsidiary, posted 2.19 trillion won in sales in the third quarter, up 906.2 billion won from the previous quarter’s 1.28 trillion won.
The operating loss narrowed to 134.6 billion won from 326.6 billion won, as selling prices went up by reflecting higher raw material costs.
The petroleum division reported a tumble in operating profit by 1.9 trillion won to 316.5 billion won in the third quarter, amid faltering demand and China’s expansion of its fuel export quota.
The company’s chemical segment booked 108.3 billion won in operating profit, up 32.3 billion won from three months ago, on widened margins and a weaker Korean currency.
The lubricant oil sector reported 336 billion won in operating profit, a record quarterly high and up 80.8 billion won on-quarter.
The oil exploration unit reported an operating profit of 160.5 billion won, down 5.7 billion won from three months ago.
Shares in SK Innovation jumped 3.27 percent to 189,500 won on the main Seoul bourse Thursday, outperforming the broader KOSPI’s 0.33 percent decline. The earnings results were released shortly after the market opened.
(Yonhap)
