SK Innovation said on the 31st that it posted revenue of 20.5332 trillion won and operating profit of 573.5 billion won in the third quarter of this year. Operating profit increased by 991.1 billion won from the previous quarter, returning to the black for the first time in three quarters since the third quarter of last year.
SK Innovation said, "Operating profit rose sharply as the oil business swung to a profit on higher oil prices and refining margins, and the solid performance of SK Innovation E&S on the back of the seasonal peak at liquefied natural gas (LNG; Liquefied Natural Gas) power plants added to the results."
By business in the third quarter: ▲ oil business revenue 12.4421 trillion won, operating profit 304.2 billion won ▲ chemical business revenue 2.4152 trillion won, operating loss 36.8 billion won ▲ lubricants business revenue 980.5 billion won, operating profit 170.6 billion won ▲ oil exploration and production business revenue 320 billion won, operating profit 89.3 billion won ▲ battery business revenue 1.8079 trillion won, operating loss 124.8 billion won ▲ materials business revenue 23.5 billion won, operating loss 50.1 billion won ▲ SK Innovation E&S business revenue 2.5278 trillion won, operating profit 255.4 billion won, respectively.
In the oil business, operating profit increased by 770.5 billion won from the previous quarter due to improved refining margins and inventory-related effects from rising oil prices. In the lubricants business, sales volume increased thanks to proactive market responses tailored to the seasonal peak, and inventory effects from higher materials and supplies prices added to that, lifting operating profit by 36 billion won from the previous quarter. In the oil exploration and production business, operating profit fell by 19.7 billion won from the previous quarter due to a decline in the gas export price from the Peru block and a drop in the blended selling price caused by a higher share of gas sales.
In the chemical business, operating profit and loss improved by 81.8 billion won from the previous quarter. Despite deteriorating market conditions for benzene and olefins, the paraxylene spread improved. In the materials business, operating profit and loss improved by 3.6 billion won from the previous quarter thanks to companywide cost-reduction efforts. SK Innovation E&S saw operating profit increase by 140.4 billion won from the previous quarter on the back of high power plant utilization maintained through enhanced competitiveness in summer cargo introductions.
The battery business posted revenue of 1.8079 trillion won and an operating loss of 124.8 billion won. However, on the basis of the integrated SK On entity created by merging SK On, SK Trading International, and SK Entome, it achieved operating profit of 17.9 billion won, marking a second straight quarter in the black.
SK On's advanced manufacturing production tax credit (AMPC) from the U.S. government came to 173.1 billion won in the third quarter, bringing the year-to-date total to 617.3 billion won. SK Innovation said, "In the battery business, the cumulative AMPC benefit through the third quarter hit a record high, and the diversification of the energy storage system (ESS; Energy Storage System) portfolio centered on North America will begin in earnest going forward."
In September, SK On signed a contract to supply lithium iron phosphate (LFP) battery ESS with a capacity of 1 gigawatt-hour (GWh) to Flatiron Energy Development in the United States and also secured the right of first negotiation for an additional 6.2 GWh project.
Seo Geon-gi, chief financial officer at SK Innovation, said, "SK Innovation's results improved significantly from the previous quarter thanks to a recovery in core businesses such as oil and LNG," and added, "Going forward, we will strengthen the foundation for future growth of the SK Innovation group and work harder to enhance corporate value, based on expansion in the ESS business within the battery business and the business synergies created by the merger of SK On and SK Enmove, which officially launches on Nov. 1."