SK IE Technology (361610) Q2 2026 earnings summary

Executive summary

• Q2 2026 saw strong revenue growth across all energy businesses, with notable performance in lubricants and batteries, despite ongoing geopolitical risks and supply chain uncertainties.

• Achieved sales of KRW 39.5 billion in 2Q26, up KRW 3.6 billion quarter-over-quarter, but down significantly year-over-year.

• Revenue for the first half of 2026 was KRW 75.4 billion, a significant decline from KRW 261.9 billion in the previous year, reflecting challenging market conditions and a slowdown in the global EV sector.

• Major restructuring included the unwinding of the BlueOval SK JV with Ford, resulting in SK On fully owning the Tennessee factory and Ford the Kentucky factory, leading to significant cost savings for SK On.

• The company is restructuring its production footprint, selling its Chinese subsidiary and halting operations at the Jeungpyeong plant to focus on the Polish facility.

Financial highlights

• Q2 revenue rose by KRW 4.87 trillion quarter-over-quarter to KRW 29.16 trillion, driven by all energy segments.

• Operating profit increased by KRW 1.33 trillion quarter-over-quarter to KRW 3.49 trillion, mainly from lubricants and battery businesses.

• Net profit for 2Q26 was KRW 1,327.8 million, reflecting impairment losses and losses from the transfer of a subsidiary.

• Gross profit for 2Q26 was KRW 30.1 billion, with a gross profit margin of 76%.

• Significant impairment losses on property, plant, and equipment (KRW 860.4 billion) and assets held for sale (KRW 580.1 billion) were recognized.

Outlook and guidance

• Crude prices and refining margins expected to remain volatile due to geopolitical tensions and supply disruptions.

• Management expects continued short-term headwinds due to weak EV demand and delayed market recovery, but anticipates long-term growth from energy storage, robotics, and next-generation battery markets.

• SK On anticipates further profitability improvements in H2 2026, leveraging cost reductions and operational efficiency.

• Stable sales volumes expected in 2H26 amid limited market volatility.

• No dividend is planned until profitability and cash flow improve.