SK Innovation posted its highest-ever quarterly operating profit in the third quarter of this year, supported by improved profitability in petroleum product exports and strong performance in its lubricants business.

SK Innovation announced on the 29th that, on a consolidated basis, it recorded third-quarter revenue of KRW 28,773.8 billion and operating profit of KRW 3,704.3 billion. Revenue increased 39.7% and operating profit surged 532.6% compared with the same period a year earlier. Compared with the previous quarter, revenue declined 1.3%, but operating profit rose 6.2%.

The improvement in earnings was driven by higher export margins stemming from global disruptions in petroleum product supply and expanded profitability in the lubricants business. Refining margins increased as supply of petroleum products decreased due to lower refinery utilization rates in the Middle East and Russia’s restrictions on diesel exports, while demand for transportation fuels grew.

SK Energy, which is responsible for the petroleum business, reported third-quarter revenue of KRW 15,927.6 billion and operating profit of KRW 1,205.8 billion. Operating profit increased by KRW 554.6 billion from the previous quarter. The gain reflected higher international petroleum product prices, improved export profitability, and increased operating rates following regular maintenance in the second quarter.

SK Enmove, which oversees the lubricants business, posted revenue of KRW 2,367.1 billion and operating profit of KRW 1,090.6 billion. Operating profit increased by KRW 398.7 billion from the previous quarter, marking a new quarterly record high. In particular, it surpassed in a single quarter the previous annual record operating profit of KRW 1,071.2 billion set in 2022.

SK Innovation E&S recorded operating profit of KRW 774.4 billion, supported by a rise in the system marginal price (SMP) of electricity due to seasonal growth in power demand and improved competitiveness in liquefied natural gas (LNG) procurement. This represents an increase of KRW 668.5 billion from the previous quarter.

SK geo centric reported operating profit of KRW 86.7 billion, driven by wider spreads for paraxylene (PX) and benzene (BZ). SK Incheon Petrochem and SK earthon recorded operating profits of KRW 270.3 billion and KRW 31.4 billion, respectively.

By contrast, SK On, which is responsible for the battery business, reported revenue of KRW 1,526.3 billion and an operating loss of KRW 80.5 billion. Earnings deteriorated due to a decline in sales volume and a base effect from one-off income in the previous quarter. SK ie technology, which oversees the separator business, also recorded an operating loss of KRW 36.8 billion.

SK On plans to improve profitability by expanding its energy storage system (ESS) business in North America. The company signed a supply contract with U.S.-based NeoVolta for approximately 9 GWh of lithium iron phosphate (LFP) pouch cells for ESS, and also concluded supply contracts for ESS-use LFP cathode materials with L&F and POSCO Future M.

In the oil exploration and production business, SK earthon commenced first crude oil production from the “Golden Camel” structure in Block 15-1/05 offshore Vietnam. The company plans to increase production through integrated development with adjacent blocks.

SK Innovation projected that favorable market conditions for its petroleum business will continue in the fourth quarter, supported by scheduled refinery maintenance, export restrictions in major countries, and increased winter-season demand. However, the company stated that it plans to enhance facility operation efficiency and manage profitability in light of potential volatility in international crude prices and refining margins.

An SK Innovation official said, “Geopolitical instability worldwide is sustaining uncertainty and price volatility in the energy market,” adding, “The company will do its utmost to ensure stable domestic supply of petroleum products while continuously improving operational efficiency in each business and strengthening fundamental competitiveness.”

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