According to foreign media reports, SK Innovation, the parent company of SK Energy, South Korea’s largest refiner, said on April 29th that it expected its refining business profit margin to remain robust in the second quarter, supported by strong demand.
SK Innovation’s first-quarter operating profit was 625 billion won ($454 million), compared with 375 billion won in the same period last year, with analysts’ average expectations of 466 billion won.
Revenue in the first quarter was 18.
9 trillion won, down 1.
5 per cent from a year earlier.
Supported by continued production cuts by OPEC+ (Organization of the Petroleum Exporting Countries+) and improved tourism demand, we expect refining margins to remain stable in the second quarter, SK Innovation said in a statement.
The company said it planned to maintain its No.
4 crude oil distillation unit (CDU) in the second quarter of this year.
SK Innovation, analysts say higher oil prices are good for SK Innovation’s petrochemical business and help offset losses in its battery division, SK On, which has been facing weak demand for electric vehicles.
SK On, a battery supplier to automakers such as Ford, Volkswagen and Hyundai, widened its operating loss to 332 billion won in the first quarter from 18.
6 billion won in the previous quarter due to a decline in battery shipments from electric vehicles.
Ford, SK On’s main customer, said earlier this month that it had delayed plans to launch three-seat electric cars in Canada and produce next-generation electric pickups in Tennessee.
Ford executives have said they will not launch the next generation of electric models until the electric vehicle business is profitable.
Analysts pointed out that SK On currently produces only soft package batteries, and the company should expand its product lineup to better meet the needs of car companies, which are using various types of batteries to reduce costs.
Cho Hyunryul, an analyst at Samsung Securities, said: “SK On needs to win new customers to make the most of its existing capacity, which is struggling with weak electric vehicle sales.
” Last week, SK On’s rival LG New Energy said it planned to minimize capital expenditure this year because of slowing global demand for electric vehicles, after it reported a 75 per cent drop in quarterly profit.
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