SK Innovation swings to quarterly profit, expects resilient Q4 refining margins
The logo of SK Innovation is seen in front of its headquarters in Seoul, South Korea, February 3, 2017. REUTERS/Kim Hong-Ji
SEOUL :SK Innovation Co Ltd, owner of South Korea's top refiner SK Energy, on Friday said refining margins are expected to remain resilient in the fourth quarter amid global supply disruptions and the onset of the winter peak demand season.
The company posted an operating profit of 573 billion won ($403.10 million) for the July-September period, versus a 423 billion won loss a year earlier. That compared with an average analyst forecast of 304 billion won profit.
Third-quarter revenue rose 16.3 per cent to 20.5 trillion won from the same period a year earlier.
SK On, which supplies batteries to Ford Motor Co, Volkswagen, Hyundai Motor among others widened its operating loss to 124.8 billion won in the third quarter from 66.4 billion won loss in the previous quarter, hurt by slowing EV battery shipments.
SK Innovation said in a statement that its battery unit's third-quarter performance was hurt by lower battery sales, affected by the phase-out of subsidies for battery-powered vehicles in the United States.
In September, SK On signed a deal with U.S.-based Flatiron Energy Development to supply lithium iron phosphate (LFP) batteries for energy storage systems (ESS), marking its first order for LFP batteries to use in ESS.
SK's deal echoes a trend among EV battery makers expanding into energy storage as a hedge against slow EV battery demand.
SK On's cross-town rival LG Energy Solution on Thursday said it expects U.S. EV battery sales to decline this year from a year ago.
Shares in SK Innovation were trading up 0.2 per cent, versus the benchmark KOSPI's 0.3 per cent rise, after the company's earnings announcement.
($1 = 1,421.4800 won)
