SK Innovation stays black in Q1, but battery unit struggles

Industry

Published: 29 Apr. 2024, 16:13 Updated: 29 Apr. 2024, 18:00

SK Innovation stays black in Q1, but battery unit struggles

SK's logo at the office building in Jongno District, central Seoul, where SK Innovation is headquartered [NEWS1]

SK Innovation posted a consensus-beating 624.7 billion won ($453.6 million) in operating profit for the first quarter of 2024, with its battery-making subsidiary SK On again failing to reach the black.

The Korean oil refiner's operating profit saw an on-year increase of 66.6 percent, overshooting the analyst expectation of 396.8 billion won compiled by FnGuide.

Revenue stood at 18.9 trillion won during the first three months of the year, down 1.5 percent, but still beat the market estimate of 18.6 trillion won.

Net losses widened to 97.6 billion won compared to 52 billion won in the first quarter of last year.

SK Innovation attributed the better-than-expected figure to “rising crude prices and refining margins” while citing “slowing demand and falling battery prices” for SK On's weak performance.

SK On logged an operating loss of 331.5 billion won in the first quarter compared to 19.5 billion won of loss in the previous quarter, marking the ninth consecutive quarter of operating loss.

Revenue decreased by 1 trillion won to reach 1.68 trillion won in the same period.

The battery maker blamed the "low operation rate of plants due to clients' inventory adjustment," as well as, "declining tax benefits from the U.S. Advanced Manufacturing Production Credit (AMPC)" for the sluggish numbers.

SK On received AMPC benefits worth 38.5 billion won under the program during the Jan. to March period, down 84 percent on quarter.

SK On, however, maintains its goal of turning to black within this year.

SK Innovation shares closed at 112,700 won, up 5.6 percent from the previous trading day.

BY SARAH CHEA [chea.sarah@joongang.co.kr]