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Title SK INNOVATION REPORTS 3rd QUARTER 2015 EARNINGS Date 2015-10-23
Contents ● Revenues in the 3rd quarter ended September 30, 2015 at KRW 12.447 trillion
● Operating profit in the 3rd quarter was KRW 363.9 billion


 

*Please note that the earnings results for fiscal 3rd quarter of 2015 are subject to further verification by independent auditors.

 

SEOUL, October 23, 2015 SK Innovation [KS 096770], Korea’s leading energy provider, today announced financial results for the third quarter ending September 30, 2015.

 

Revenue in the third quarter was KRW 12.447 trillion, down by 4% from KRW 12.998 trillion from the previous quarter. The third quarter revenue declined as weak oil prices have pushed down product prices.

 

The third quarter operating profit stood at KRW 363.9 billion, down by 63% from KRW 987.9 billion, quarter-on-quarter. The drop in the operating profit mainly reflected inventory losses and weak oil refining margins.

 

As for the financial structure, SK Innovation has posted KRW 12.4 billion in non-operating loss.

 

 

3rd QUARTER BUSINESS ANALYSIS

 

SK Energy

·         SK Energy, the company’s petroleum business, recorded revenue of KRW 9.036 trillion and operating profit of KRW 106.8 billion in the third quarter, down by KRW647.9 billion quarter-on-quarter. The operating profit has declined due to weak oil refining margins and inventory losses driven by a significant decrease in oil prices during the period.

·         Global oil prices were under downward pressure in the 3rd quarter amid continuous supply glut and concerns over China's economic slowdown. The oil prices are expected to fluctuate at the current levels as OPEC members may keep pumping up more oil and non-OPEC nations may cut production. 

·         The refining margins are likely to improve slightly through the rest of the year due to regular maintenance activities in the industry and a seasonal pick-up in winter demands.

 

SK Global Chemical

·         SK Global Chemical posted revenue of KRW 2.354 trillion and operating profit of KRW 119.8 billion in the third quarter, down by KRW 122.9 billion compared to the previous quarter.  The decline in the operating profit reflected weak product spreads and one-off expenses such as a write-down related to Jurong Aromatics in Singapore.

·         The spread for ethylene went down as the supply rose after regular maintenance is completed. Paraxylene spread remained stable. The spread for benzene has dropped due to oversupply in the region.

·         The spread for ethylene is forecast to stabilize at the current levels thanks to the balance of demand and supply. Paraxylene spread is also expected to be stable as demand is likely to be pushed up in the coming peak season despite an increase in supply following the operation of new plants.

 

SK Lubricants

·         SK Lubricants posted revenue of KRW 665.2 billion and operating profit of KRW 83 billion in the 3rd quarter, a KRW 41.5 billion rise from the previous quarter.

·         The operating profit jumped due to higher base oil margin driven by weak oil prices.   

·         The base oil margin is expected to be solid as the demand for premium base oil gradually rises.

 

Exploration & Production

·         SK Innovation’s E&P business recorded revenue of KRW 159.3 billion and operating loss of KRW 1.8 billion in the 3rd quarter down from operating profit of KRW 36.4 billion in the previous quarter.

·         The operating loss reflected the impact from weak oil prices and one-off costs after closing the exploration for Zhambyl block in Kazakhstan.

 

 

 

 

 

 

3Q 2015 FINANCIAL PERFORMANCE*

(Unit: KRW in billions)

3Q 14

2Q 15

3Q 15

QoQ

YoY

Revenue

16,609.00

12,998.30

12,447.50

-4.20%

-25.10%

Operating Profit

48.9

987.9

363.9

-63.20%

644.20%

 

 

 

 

 

 

3Q 2015 BUSINESS PERFORMANCE *

(Unit: KRW in billions)

3Q 14

2Q 15

3Q 15

SK Energy

Revenue

12,126.20

9,514.10

9,036.00

(Petroleum)

OP

-226.1

754.7

106.8

SK Global Chemical

Revenue

3,468.80

2,585.60

2,354.30

(Petrochemical)

OP

130.8

242.9

119.8

SK Lubricants

Revenue

701.4

656.4

665.2

(Lubricants)

OP

73.2

41.5

83

Exploration & Production

Revenue

239.8

162.8

159.3

OP

121.4

36.4

-1.8


 

About SK Innovation

 

Founded in 1962 as Korea’s first oil refiner, SK Innovation is one of the world’s leading energy and petrochemical companies. SK Innovation employs nearly 6,500 people and posted KRW 65.8 trillion in sales in 2014.

 

SK Innovation operates through five subsidiary companies: SK Energy, SK Incheon Petrochemical, SK Trading International, SK Global Chemical, and SK Lubricants. Their independent management structures enables each company to respond rapidly to changes in the global business environment and expedite growth through a fast decision-making process. Each company executes its own business strategy, consistent with its vision and optimized for its unique environment.

 

Based on its strong R&D capabilities, SK Innovation is a leading technology company that focuses on lithium-ion batteries for electric vehicles, information electronic materials, and its exploration and production business. SK Energy is the largest oil refiner and marketer in Korea. In July 2013, SK Incheon Petrochemical and SK Trading International were established. Both were previously part of SK Energy. SK Incheon Petrochemical focuses on high-value-added petrochemical products including paraxylene, while SK Trading International trades petrochemical and crude oil products. SK Global Chemical, a global leader in green chemicals and life sciences, is especially active in the burgeoning Asian market. SK Lubricants is a global leader in the base oil and lubricant market through affiliations with major European, North American, and Asian companies.

 

 

Contact at SK Innovation

JEONG, YONG-JUN

Public Relations Team

Telephone: (82)2-2121-5953

Mobile: (82)10-9940-8963

Email: june@sk.com