{"id":290,"date":"2019-10-31T10:35:56","date_gmt":"2019-10-31T01:35:56","guid":{"rendered":"https:\/\/askinno.com\/global\/?p=290"},"modified":"2022-04-04T20:10:07","modified_gmt":"2022-04-04T11:10:07","slug":"sk-innovation-publishes-its-2019-third-quarter-results-deep-change-created-favorable-results-across-the-non-refinery-business-exceeding-market-predictions","status":"publish","type":"post","link":"https:\/\/askinno.com\/global\/archives\/290","title":{"rendered":"SK Innovation Announces 2019 Third Quarter Results: “Favorable Results Came Across the Non-Refinering Business Came From Deep Change, Exceeded Market Predictions\u201d"},"content":{"rendered":"

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\u25a0 Total sales of KRW 12.3725 trillion despite difficult environment, operating profit of KRW 330.1 billion exceeds market predictions
\n\u25a0\u00a0Innovations based\u00a0on ‘Deep Change’\u00a0in business model helped to resist\u00a0industry fluctuations; non-refinering business paid off
\n\u25a0 Regular maintenance in 4Q and IMO 2020 expected to drive greater refining margins for the refinery business, higher expectations for qualitative improvement in oil business
\n\u25a0\u00a0SK Innovation\u00a0will accelerate ‘Deep change’ by\u00a0“advancing into the packaging market and\u00a0expanding battery and LiBS plants across the world without delay.\u201d<\/span><\/strong><\/span><\/p>\n

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The figures contained within this article have not undergone an external accounting review; therefore, it may be subject to change.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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SK Innovation (CEO & President Kim Jun, www.skinnovation.com) published its third quarterly reports on the 31st, with a total sales figure of KRW 12.3725 trillion and an operating profit of KRW 330.1 billion. The results managed to exceed the market predictions despite the difficulties that plagued the third quarter, driven forward by a series of favorable results across the chemical, lubricant, and non-refining businesses.<\/span><\/p>\n

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The oil business managed to improve the refining margins thanks to the global maintenance during the third quarter and the benefits from IMO 2020, but the ongoing trade war between the United States and China and the concerns of the slowdown in global economy have driven the oil prices down, which brought the performance of the company down as well. The chemical and lubricant businesses continued the trend of minimal changes because of the global constructions and expansions on one hand and the slowdown of the economy on the other.<\/span><\/p>\n

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SK Innovation described the results as \u201cOur continued dedication to business model innovation\u00a0based on ‘Deep Change’ allowed us to build a strong resistance to changes in market trends. The robust performance of our non-refining businesses despite the difficult situation managed to help us cancel out the adverse effects of oil price changes, thus\u00a0we were able to\u00a0achieve\u00a0much greater management results\u00a0than what the market predicted.\u201d<\/span><\/p>\n

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Despite the general increases in refining margins, SK Innovation\u2019s oil business suffered from the losses in inventory from the downward trend of global oil prices, recording an operating profit of KRW 65.9 billion that represents a decrease of KRW 213.4 billion from the previous quarter. The fourth quarter is expected to bring even greater improvements in refining margins with the continued maintenances and the increased demand from the implementation of the IMO2020, bringing higher hopes of qualitative improvement around the refinery business.<\/span><\/p>\n

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Despite the inventory-related losses because of the decrease of prices in partner companies, the increased refining margin of benzene and propylene in the chemical business recorded an operating profit of KRW 193.6 billion, which represents an increase of KRW 9.1 billion from the previous quarter. The lubricant business managed to improve its refining margins with the increased shares of high-value markets, recording an operating profit of KRW 93.6 billion and an increase of KRW 15.4 billion from the previous quarter.<\/span><\/p>\n

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For the E&P business, the increased operating costs canceled out the normalization of the Peru rigs in the third quarter, decreasing the operating profit by KRW 2.5 billion to KRW 48.5 billion. SK Innovation has decided upon the sales of Peru 88 and 56 rigs last September, and the process is expected to be finalized during the early half of next year.<\/span><\/p>\n

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The battery business managed to record KRW 42.7 billion in operating losses. The decreases in inventory-related losses and the increases in sales managed to reduce the losses by KRW 24.4 billion, continuing the positive trend of loss reduction for three consecutive quarters.<\/span><\/p>\n

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The material business suffered from a temporary increase in operation costs, which canceled out the increased sales of LiBS (Lithium-ion Battery Separator), reducing the operating profits by KRW 1.9 billion to KRW 25.4 billion. Once the mass production of LiBS in Jeungpyeong Plants 12 and 13 starts in the fourth quarter, the material business is expected to further contribute to the positive returns within the business.<\/span><\/p>\n

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A representative of SK Innovation commented, \u201cThe following quarters represent the true start of our foray into the global packaging market based on the ongoing M&A projects in SK Global Chemical. We will accelerate ‘Deep change’ by\u00a0advancing into the packaging market and\u00a0expanding battery and LiBS plants across the world without delay to minimize the effect of external factors, such as oil prices and margins in our business.\u201d<\/span><\/p>\n

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[Attachment]<\/strong><\/span><\/p>\n

1. Sales and Operating Profits (based on K-IFRS)
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(Unit: KRW 100,000,000)<\/span><\/p>\n\n\n\n\n\n
<\/td>\n3Q18<\/span><\/strong><\/td>\n2Q19<\/span><\/strong><\/td>\n3Q19<\/span><\/strong><\/td>\nYoY<\/span><\/strong><\/td>\nQoQ<\/span><\/strong><\/td>\n<\/tr>\n
Sales<\/span><\/strong><\/td>\n149,587<\/span><\/td>\n131,036<\/span><\/td>\n123,725<\/span><\/strong><\/td>\n\u25b325,862<\/span>
\n(\u25b317.3%)<\/span><\/td>\n		\u25b37,311<\/span>
\n(\u25b3<\/span>5.6%)<\/span><\/td>\n<\/tr>\n
Operating
\nProfit<\/span><\/strong><\/td>\n		8,359<\/span><\/td>\n4,975<\/span><\/td>\n3,301<\/span><\/strong><\/td>\n\u25b35,508
\n(\u25b360.5%)<\/span>
\n<\/span><\/td>\n		\u25b31,674
\n(\u25b333.6%)<\/span>
\n<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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2. Results<\/span>\u00a0by Business* (based on K-IFRS)<\/strong><\/p>\n

(Unit: KRW 100,000,000)<\/span><\/p>\n\n\n\n\n\n
<\/td>\nOil**<\/span><\/strong><\/td>\nChemical<\/span><\/strong><\/td>\nLubricant<\/span><\/strong><\/td>\nE&P<\/span><\/strong><\/td>\nOthers<\/span><\/strong><\/td>\nTotal<\/span><\/strong><\/td>\n<\/tr>\n
Sales<\/span><\/strong><\/td>\n86,820<\/span><\/td>\n24,579<\/span><\/td>\n8,114<\/span><\/td>\n1,640<\/span><\/td>\n2,572<\/span><\/td>\n123,725<\/span><\/strong><\/td>\n<\/tr>\n
Operating
\nProfit<\/span><\/strong><\/td>\n		659<\/span><\/td>\n1,936<\/span><\/td>\n936<\/span><\/td>\n485<\/span><\/td>\n\u25b3715<\/span><\/td>\n3,301<\/span><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

* Excluding intergroup trade
\n<\/span><\/em><\/span>** Includes the results from SK Trading International and SK Incheon Petrochem<\/span><\/em><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

  \u25a0 Total sales of KRW 12.3725 trillion despite difficult environment, operating profit of KRW 330.1 billion exceeds market predictions \u25a0\u00a0Innovations based\u00a0on ‘Deep Change’\u00a0in business model helped to resist\u00a0industry fluctuations; non-refinering business paid off \u25a0 Regular maintenance in 4Q and IMO 2020 expected to drive greater refining margins for the refinery business, higher expectations for … Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":293,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[870,4],"tags":[109,108,35,111,110,107,15],"class_list":["post-290","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-results","category-press-room","tag-109","tag-3q","tag-battery","tag-deep-change","tag-libs","tag-result","tag-sk-innovation"],"acf":[],"_links":{"self":[{"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/posts\/290","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/comments?post=290"}],"version-history":[{"count":14,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/posts\/290\/revisions"}],"predecessor-version":[{"id":9734,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/posts\/290\/revisions\/9734"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/media\/293"}],"wp:attachment":[{"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/media?parent=290"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/categories?post=290"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/tags?post=290"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}