SK IE Technology (A361610) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue rose to KRW 29,157.2 billion, up KRW 4,866.2 billion quarter-over-quarter, driven by strong performance in refining and lubricants.

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

• Operating profit increased by KRW 1,325.1 billion to KRW 3,487.3 billion, mainly from lubricants and battery businesses.

• Major restructuring included unwinding the BlueOval SK JV with Ford, resulting in SK On Tennessee becoming fully owned and significant annual cost savings.

• Strategic focus on consolidating production bases and strengthening the European supply network.

Financial highlights

• Non-operating losses increased due to PRF derivative valuation losses (KRW 1.2 trillion) and SK IET impairment losses (KRW 1.4 trillion).

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

• Debt-to-equity ratio increased to 152% from 68% in the previous quarter.

• Net debt increased by KRW 1.1 trillion to KRW 23.7 trillion due to lower cash balances.

• EBITDA for 2Q26 was KRW 34.6 billion, with an EBITDA margin of 88%.

Outlook and guidance

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

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

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

• Positive momentum anticipated from tighter EU trade policies and environmental regulations.

• SK E&S expects LNG demand to rise in Q3 with seasonal power needs, but spot price volatility remains a risk.