SK Innovation posts quarterly profit surge, projects strong crack spreads
The logo of SK Innovation is seen in front of its headquarters in Seoul, South Korea, February 3, 2017. REUTERS/Kim Hong-Ji
SEOUL, Jan 28 : SK Innovation Co Ltd, owner of South Korea's biggest refiner SK Energy, said on Wednesday it expects crack spreads to remain strong, as U.S. low-oil-price policies persist despite easing winter demand and hopes of a Russia–Ukraine ceasefire.
The company posted an operating profit of 295 billion won ($205.88 million) for the October-December period, versus a profit of 176 billion won a year earlier.
That, however, fell short of an average analyst forecast of 351 billion won.
SK Innovation said in a statement that despite strong fourth-quarter refining margins, operating profit fell by 291 billion won from the previous quarter, weighed down by slowing profitability in its battery business.
Operating losses at battery unit SK On, which supplies Ford Motor Co, Volkswagen and Hyundai Motor, widened to 441 billion won in the fourth quarter from 125 billion won in the prior quarter, as EV battery sales in the United States slowed further following the expiry of subsidies for battery-powered vehicles.
Peer S-Oil Corp, whose main shareholder is Saudi Aramco, said on Monday that it had logged a 91 per cent surge in fourth-quarter operating profit and expected first-quarter refining margins to remain robust due to steady demand, supply disruptions and the planned closure of a U.S. refinery.
Shares in SK Innovation were trading up 0.4 per cent in morning trade on Wednesday after the earnings announcement, versus benchmark KOSPI's 1.3 per cent rise.
($1 = 1,432.9000 won)
