SK Innovation Q3 net profit plummets by 72% due to low refining margins

South Korea’s top refiner, SK Innovation Co., reported that its third-quarter net profit declined by 72% from the same period a year earlier. The dramatic fall in net profits was attributed to low refining margins. The company posted net income amounting to KRW509.7 billion (US$465 million) in the July-September period compared with KRW1.82 trillion (US$ 1.7 billion) a year ago.
However, sales rose by 7.5% to KRW18.5 trillion (US$17 billion) during the same period, but operating profit went down by 24.7% to KRW648.7 billion (US$595 million). SK made a turnaround in the third quarter from a loss of KRW238.4 billion (US$219 million) in the second quarter. This came about when SK Energy, a subsidiary that handles its petroleum business, performed better due to an increase in oil prices, as well as strong refining margins. The company also posted gains in operating profit in the third quarter from an operating loss of KRW102.8 billion (US$94 million) in the second quarter.
SK’s subsidiaries, SK Global Chemical Co., reported an operating profit of KRW249.9 billion (US$229 million) in the July-September period; and SK Lubricants Co. posted KRW106.5 billion (US$98 million) in operating profit in the same period. (October 26, 2012)