SK Innovation (096770) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached KRW 24.21 trillion with operating profit of KRW 2.16 trillion, marking a return to profitability and driven by higher crude and petroleum product prices, inventory gains, and LNG project milestones.

• Major LNG supply and infrastructure projects were secured in Australia and Vietnam, including the first LNG cargo from Barossa/CB Gas Field and selection as operator for the Quynh Lap LNG power project.

• Battery and ESS businesses improved sales mix, narrowed losses, and secured over 50% of a government ESS tender, with strategic wins and a focus on operational efficiency.

• The business portfolio is diversified across energy, chemicals, batteries, materials, and city gas, with energy/chemicals contributing 78% of sales.

• Major investments and M&A activity included the merger with SK E&S, expansion in battery and materials, and ongoing global portfolio rebalancing.

Financial highlights

• Q1 2026 revenue rose KRW 4.54 trillion QoQ to KRW 24.21 trillion, with operating profit up KRW 1.87 trillion QoQ to KRW 2.16 trillion, mainly from inventory-related gains.

• EBITDA increased to KRW 2.94 trillion, a rise of KRW 1.81 trillion QoQ.

• Non-operating loss narrowed to KRW 767.3 billion, with FX and derivative losses partially offset by other income.

• Corporate-wide inventory gain was KRW 1.02 trillion, with SK Energy contributing KRW 776 billion.

• EPS for Q1 2026 was KRW 5,729, compared to a loss of KRW 21,502 in Q1 2025.

Outlook and guidance

• Continued volatility expected in oil prices and refining margins due to Middle East conflict and Strait of Hormuz closure.

• Battery business aims for profitability improvement via cost reduction, portfolio diversification, and ESS growth in North America and Europe.

• ESS long-duration business expected to contribute to profits starting 2027, with further government tender participation planned.

• Ongoing investments in energy transition, renewables, and hydrogen, with a focus on global market expansion.

• City gas segment anticipates seasonal slowdown but plans inventory buildup and maintenance for summer demand.