SK Innovation (096770) investor relations material

Executive summary

• Q3 revenue was KRW 28,773.8 billion, down KRW 383.4 billion QoQ; operating profit rose KRW 217 billion to KRW 3,704.3 billion.

• Refining, lubricants and power generation strengthened; battery operations remained loss-making, though adjusted profitability improved. ESS agreements and Vietnam oil production advanced.

Financial highlights

• Revenue was KRW 28,773.8 billion, down KRW 383.4 billion QoQ and up KRW 8,181.9 billion YoY; operating profit was KRW 3,704.3 billion, up KRW 217.0 billion QoQ and KRW 3,118.6 billion YoY.

• EBITDA was KRW 4,460.5 billion, up KRW 207.6 billion QoQ; non-operating loss narrowed to KRW 190.4 billion from KRW 2,917.6 billion in Q2.

• Net profit rose KRW 2,944.1 billion QoQ to KRW 3,513.8 billion; profit before tax was KRW 3,513.8 billion versus a KRW 569.7 billion loss in Q2.

• Non-operating items included FX gains of KRW 120.5 billion, product derivative losses of KRW 100.5 billion, net interest expense of KRW 244.2 billion and equity-method gains of KRW 91.9 billion.

Outlook and guidance

• Q4 refining earnings are expected to be supported by tighter supply and winter demand, unless crude prices fall significantly; OSPs are expected to stay relatively low.

• Aromatics markets are expected to remain firm to steady on regional PX maintenance and US arbitrage; operations and product mix will be optimized amid volatility.

• Battery sales may partially recover as major-customer volumes rise; priorities include demand-aligned production, cost reduction and additional ESS orders.

• Power earnings face seasonal demand softness and high LNG spot prices; long-term and Barossa LNG procurement and winter inventory management are expected to mitigate volatility.