South Korea’s SK Innovation reports Q4 results

South Korea’s SK Innovation reported total sales of 78.26 million barrels of refined oil products in the fourth quarter of 2012, higher than last year’s figure and third quarter sales. Exports in the fourth quarter amounted to 61.8% of total sales, also higher than the previous year’s exports.
 
The refiner’s sale of gasoline and diesel fuel in the fourth quarter also registered higher than the previous year. However, kerosene was slightly down, while jet fuel sales also increased from a year ago.
 
The operating rate of its crude distillation units remained flat at an average rate of 80% in the fourth quarter.
 
SK Innovation reported a net profit of KRW 228.0 billion (US$210.7 million) for the fourth quarter, up by 50.8% year-on-year. Fourth quarter operating profit fell by 44.1% year-on-year to KRW 202.1 billion (US$187 million) while fourth quarter revenue was up by 1.4% to KRW 17.16 trillion (US$15.8 billion). The company said that weak refining margin, inventory-related losses incurred by lower oil prices, and reduction in base oil demand, affected the final quarter’s operating profit. Increase in net profit was helped by gains from foreign exchange.
 
SK Energy, an SK Innovation subsidiary, posted an increase in oil revenue, but also registered a lower operating profit, due to the weak refining margin which resulted from the unfavorable market conditions and an inventory-related loss which was caused by lower oil prices during the fourth quarter.
 
In a statement, the company said that the refining margin “is forecast to improve in Q1 2013, as stable demands are expected from emerging Asian countries such as Indonesia and Vietnam, especially during the season of overall supply reduction as European and other Asian refineries enter their regular maintenance period.” (January 31, 2013)