1 Trillion Won Profit
SK Innovation announced on July 22 that the company posted 10.28 trillion won (US$89.93 billion) in sales and 1.12 trillion won (US$973.9 million) in operating income in the second quarter of this year.
It is the first time for the company to post over one trillion in operation income since 1.356 trillion won (US1.179 billion) in the first quarter of 2011. Its operating income in the first half of this year which combines the first and second quarters arrived at 1.964 trillion won (US$1.708 billion), recording the highest-ever figure. Market experts said that 844.8 billion won (US$734.6 million) in the first quarter was an earnings surprise. But in the second quarter, the figure even jumped by nearly 300 billion won (US$260.8 million).
By business sector, the petrochemical business, the main business of the company led the way by chalking up 705.2 billion won (US$613.2 million) in operating income. In particular, a rise in oil prices significantly contributed. Inventory effects will reach 450 billion won (US$391.3 million) thanks to an oil price hike, SK Innovation announced on the day via a conference call.
Its chemical business recorded the highest quarterly record while posting 302.7 billion won (US$263.2 million) in operating income despite a drop in sales due to regular facility maintenance in the second quarter. This is because its spread stayed strong amid steady demand for its key products such as ethylene and paraxylene (PX).
Some analysts say that decisive pre-emptive investment is giving a big boost to the chemical business’ performances. One good example is China-Korea Petrochemical established jointly by Sinopec, the largest government-run oil company in China, and SK in 2013. China-Korea Petrochemical which produces ethylene and polyethylene (PE) began to generate profits in one year since its establishment, becoming the epitome of the SK Group’s global partnering.
Besides, its lubricant business which leads the domestic market posted results similar to those of the previous quarter by inking 132.9 billion won (US$115.5 million) in operating income. Its crude oil development business posted 16.6 billion won (US$14.4 million), a drop of 6.6 billion won (US$5.73 million) from the previous quarter due to an increase in operation expenses triggered by the expansion of production volume.