Towards $30Bn Company
SK Innovation is set to seek M&As actively as it has secured abundant money with the drop of oil prices and sharp rise in its profit s due to demand increase last year.
"We will make every possible effort to innovate and expand our business portfolios amid uncertain global market conditions," SK Innovation vice chairman Chung Chul-khil said at a press conference held at the company's head office in downtown Seoul on April 20.
“We have set the goal of our activities of M&As and joint venturing to boost corporate values, not making any blind shoots,” Chung said, adding, “The company will focus on producing high value-added products and investing in shale gas and other unconventional natural resources.”
The CEO went on to say, "We will push ahead with bold M&As in the petrochemicals and EV battery sectors this year," hinting that the company would sign a big M&A deal in China soon.
SK Innovation said it is mulling over building an EV battery facility in China. According to the company, its subsidiary SK Global Chemical, whose de facto headquarters was moved to China early this year, and set up a joint venture BESK Technology with China’s state-run automaker BAIC Group.
Last July, the company doubled its EV battery-making capacity at the plant in Seosan, South Choongcheong Province, South Korea, which produces currently 30,000 units per year, but it still has enough order backlog to keep it busy for seven years.
SK will double its market value to 30 trillion won (US$26 billion) by 2018 from the current 15 trillion won (US$ 13 billion) by focusing on high value-added products and investing in shale gas and other unconventional natural resources.
In 2014, SK Innovation posted an operating loss of 182.8 billion won (US$158.9 million) for the first time in 37 years. But its sales and profits rebounded last year to garner an operating profit of 1.98 trillion won (US$1.72 billion) due to cost cutting and improved margins of refining business.
Consequently, the firm's debt fell to 3.5 trillion won (US$3.04 billion) in 2015 from 7.8 trillion won (US$6.75 billion) a year earlier, while its debt-to-equity ratio dropped to 84 percent from 119 percent a year ago.