SK Innovation (096770) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was KRW 21,146.6 billion, up KRW 1,740.9 billion quarter-over-quarter, driven by the full consolidation of SK Innovation E&S post-merger.

• Operating profit declined by KRW 204.5 billion, resulting in an operating loss of KRW 44.6 billion, due to weak crude prices, spreads, and margin pressures in key segments.

• Major battery supply agreements were signed, including a 99.4 GWh contract with Nissan and a 20 GWh order from Slate, supporting customer diversification and future growth.

• SK Earthon confirmed oil reserves and achieved successful crude oil test production in Vietnam Block 15-2/17, with ongoing appraisal drilling.

• The business portfolio is diversified across petroleum, chemicals, batteries, materials, and energy solutions, with ongoing investments in green and future-oriented businesses.

Financial highlights

• Q1 2025 revenue: KRW 21,146.6 billion, up KRW 1,740.9 billion quarter-over-quarter.

• Operating loss: KRW 44.6 billion, down KRW 204.5 billion from previous quarter.

• Net loss attributable to owners: KRW 229.0 billion, with basic loss per share of KRW 1,539.

• Debt-to-equity ratio: 207%, up from 179% at year-end 2024.

• Total assets: KRW 111.9 trillion; equity: KRW 36.5 trillion; net debt increased by KRW 4.3 trillion from year-end.

Outlook and guidance

• Battery business expects continued improvement in U.S. plant utilization and sales volume in Q2.

• Refining margins are expected to recover gradually in Q2 2025 with seasonal demand and refinery turnarounds.

• Petrochemical spreads may improve modestly, but macro uncertainties and U.S.-China trade tensions persist.

• Lubricants anticipate stable profitability in 2025 despite new global capacity.

• The company aims to strengthen its energy transition strategy, focusing on battery, green energy, and LNG value chain expansion.