■ Revenue of KRW 28.77 trillion and operating profit of KRW 3.70 trillion, with broad-based earnings improvement across key energy businesses
■ Strong export margins amid global petroleum product supply disruptions; lubricants business posts record-high quarterly operating profit
■ Committed to ensuring stable supply amid energy market uncertainty, while continuing to enhance operational efficiency and strengthen business competitiveness
SK Innovation posted its highest-ever quarterly operating profit in the third quarter, driven by improved profitability in petroleum product exports and strong performance in its lubricants business.
SK Innovation announced on October 29 that it recorded consolidated revenue of KRW 28.77 trillion and operating profit of KRW 3.70 trillion for the third quarter (Q3) of 2026. Compared to the previous quarter, revenue decreased by KRW 383.4 billion while operating profit increased by KRW 217.0 billion. On a year-over-year (YoY) basis, revenue increased by KRW 8.18 trillion and operating profit rose by KRW 3.12 trillion.
The strong Q3 performance was largely driven by firm export margins, as global petroleum product supply tightened amid lower utilization rates at Middle Eastern refineries and Russia’s restrictions on diesel exports. The lubricants business also led the earnings improvement, posting a record-high quarterly operating profit amid disruptions in the global base oil supply.
In the refining business, international petroleum product prices and refining margins remained strong as geopolitically driven supply disruptions persisted and demand for transportation fuels increased during the summer driving season. Supported by improved export profitability, SK Energy posted Q3 operating profit of KRW 1.21 trillion, up KRW 554.6 billion QoQ.
SK Enmove’s operating profit rose by KRW 398.7 billion QoQ to KRW 1.09 trillion, as high base oil spreads were sustained amid continued supply disruptions in the global base oil market. The figure exceeds the company’s previous record for full-year operating profit of KRW 1.07 trillion, set in 2022, in a single quarter.
SK Enmove recently signed a long-term Group III base oil supply agreement with HF Sinclair, a major U.S. refiner, expanding its distribution network in North America. Leveraging its product competitiveness and global production footprint, the company continues to strengthen its position in the global market despite supply disruptions originating in the Middle East.
SK Innovation also highlighted meaningful progress at SK On in expanding energy storage system (ESS) orders in North America and securing a supply chain for lithium iron phosphate (LFP) materials for ESS. Building on an approximately 9 GWh supply agreement for LFP pouch cells with NeoVolta of the United States, as well as LFP cathode supply agreements with L&F and POSCO Future M, SK On plans to broaden its North American ESS customer base and strengthen its material sourcing foundation to establish a platform for stable growth in the ESS business.
In addition, the company announced that SK Earthon has commenced its first crude oil production at the Lac Da Vang (Golden Camel) structure in Block 15-1/05 offshore Vietnam, which is expected to contribute to expanding its production portfolio in Vietnam and strengthening its mid- to long-term earnings base. SK Earthon plans to efficiently increase reserves and production going forward through tie-in development of adjacent blocks.
Q3 2026 Business Performance
On a consolidated basis, Q3 results by subsidiary were as follows:
- SK Energy: Revenue of KRW 15.93 trillion, operating profit of KRW 1.21 trillion. Operating profit increased by KRW 554.6 billion QoQ, as export profitability improved on higher crude oil prices and refining margins. Global petroleum product supply disruptions intensified amid continued geopolitical instability in the Middle East following the collapse of the ceasefire agreement between the U.S. and Iran, as well as Ukrainian attacks on Russian refining facilities. Higher utilization rates, reflecting a base effect from scheduled maintenance in Q2, also contributed to the improvement.
- SK Geo Centric: Revenue of KRW 3.57 trillion, operating profit of KRW 86.7 billion. Operating profit increased by KRW 43.0 billion QoQ as spreads for paraxylene (PX) and benzene (BZ) widened. Product supply tightened due to scheduled maintenance at regional PX facilities and increased gasoline blending demand for aromatics feedstock amid strong gasoline prices.
- SK Enmove: Revenue of KRW 2.37 trillion, operating profit of KRW 1.09 trillion. Operating profit increased by KRW 398.7 billion QoQ to a record quarterly high, as profitability improved on the back of sustained high base oil spreads amid continued disruptions in global base oil supply.
- SK Incheon Petrochem: Revenue of KRW 2.96 trillion, operating profit of KRW 270.3 billion.
- SK Earthon: Revenue of KRW 68.6 billion, operating profit of KRW 31.4 billion. Solid earnings momentum continued in Q3, supported by a recovery in sales volume and firm international crude oil and gas prices.
- SK On (Battery Business): Revenue of KRW 1.53 trillion, operating loss of KRW 80.5 billion. Revenue and operating income declined QoQ due to lower sales volume and a base effect from one-time gains recognized in the previous quarter. Excluding one-off factors, however, underlying profitability continued to improve, supported by company-wide cost reductions and operational efficiency initiatives.
- SK On Trading International: Revenue of KRW 23.61 trillion, operating profit of KRW 351.8 billion.
- SK IE Technology: Revenue of KRW 41.4 billion, operating loss of KRW 36.8 billion.
- SK Innovation E&S: Revenue of KRW 3.12 trillion, operating profit of KRW 774.4 billion. Operating profit increased by KRW 668.5 billion QoQ, as power plant utilization rates and profitability improved on a higher system marginal price (SMP) driven by seasonal electricity demand, along with the stable introduction of competitively priced long-term contract liquefied natural gas (LNG) and commissioning volumes from the Barossa gas project in Australia.
Q4 2026 Outlook
In the refining business, market conditions are expected to remain strong in the fourth quarter (Q4), as scheduled maintenance at major refineries and export restrictions in key countries further reduce petroleum product supply, coinciding with rising winter demand. However, taking into account market uncertainties including the possibility of a sharp decline in crude oil prices and refining margins, the company plans to focus on securing profitability through optimized facility operations.
The petrochemical business is expected to see slowing demand for downstream products in Q4. Market conditions are nonetheless projected to remain firm on a tight supply balance, driven by scheduled maintenance at regional PX facilities and the resumption of arbitrage flows to the U.S. Reduced aromatics production resulting from strong gasoline prices, together with concerns over delays in the startup of new capacity, are also expected to provide additional support.
In the lubricants business, while there may be some volatility depending on the timing of the lifting of the blockade around the Strait of Hormuz, current high base oil spreads are expected to narrow gradually should global base oil supply disruptions ease. However, as the recent Middle East disruption has underscored the need for customers to diversify their sourcing, the company expects to maintain solid profitability even after supply conditions normalize, supported by its stable supply capabilities and the trust it has built with customers over time.
Regarding the petroleum development business, volatility in international crude oil and natural gas prices is anticipated amid geopolitical uncertainty. The company plans to maintain daily production and secure continued profitability through stable production operations at its block in China and the drilling of additional production wells in its Vietnam.
The battery business is expected to see a gradual recovery in sales in Q4, driven by higher sales volumes among major customers. In North America, a gradual demand recovery is anticipated based on major customers’ sales trends and policy support in certain regions, while in Europe, electric vehicle support policies in major countries and a growing preference for locally produced products are expected to work favorably. Given that market uncertainty is likely to persist, the company plans to continue optimizing production and supply operations in line with customer demand and pursuing company-wide cost reductions, while actively securing additional ESS orders to sustain the improvement in earnings.
The power and LNG business is expected to face a decline in SMP due to seasonally lower electricity demand in Q4, along with cost pressure from high LNG spot prices. In response, the company plans to manage earnings volatility through the stable introduction of competitively priced long-term contract LNG and volumes from the Barossa gas project in Australia, while securing appropriate inventory levels to meet winter power generation demand.
A representative from SK Innovation stated, “Uncertainty and price volatility in the energy market are continuing amid global geopolitical instability.” The representative added, “We will do our utmost to ensure the stable domestic supply of petroleum products, while continuing our efforts to enhance operational efficiency and strengthen the fundamental competitiveness of each business.”
[Attached]
1. SK Innovation quarterly earnings (based on K-IFRS) (Unit: KRW hundred million)
| Q3 2025 | Q2 2026 | Q3 2026 | YoY | QoQ | |
|---|---|---|---|---|---|
| Revenue* | 205,919 | 291,572 | 287,738 | +81,819 | -3,834 |
| Operating income | 5,856 | 34,873 | 37,043 | +31,186 | +2,170 |
2. Q3 2026 performance by business (based on K-IFRS) (Unit: KRW hundred million)
| SK Energy | SK Geo Centric | SK Enmove | SK Incheon Petrochem |
SK Earthon | |
|---|---|---|---|---|---|
| Revenue* | 159,276 | 35,666 | 23,671 | 29,587 | 686 |
| Operating income | 12,058 | 867 | 10,906 | 2,703 | 314 |
| SK On (Battery) | SK On Trading International | SK IE Technology | SK Innovation E&S | Others** | Total |
|---|---|---|---|---|---|
| 15,263 | 236,137 | 414 | 31,237 | -244,199 | 287,738 |
| -805 | 3,518 | -368 | 7,744 | 106 | 37,043 |
**Others: Staff-related costs and consolidation adjustments
