SK Innovation has posted two straight quarters of loss as of the second quarter this year but has managed to lessen the rate of loss.
The South Korean energy firm posted an operating loss of 439.7 billion won and sales of 7.1996 trillion won in the second quarter of the year. Sales was 44.7% down from a year prior. Compared to the previous quarter, operating profit rose 75% and sales dropped 35.5%, SK Innovation said.
The company has posted an operating loss of 775.2 billion won in the first quarter due to oil prices falling from the impact of the COVID-19 pandemic.
SK Innovation said the price drops in oil and the lowered sales caused revenue to decline for the second quarter. Operating profit was negatively impacted in both oil and petrochemicals. However, oil price has stabilized in the second quarter compared to the first quarter and Middle East’s official selling price (OSP) dropping helped ease the rate of loss, the company said.
SK Innovation said helped by global efforts to revive the economy coupled with oil prices reviving, it expected margins from refinement to improve in the second half of the year.
The company’s oil business was responsible for 432.9 billion won of operating loss. Lagging effect from OSP falling and oil prices rising helped improve margins, SK Innovation said.
Its chemical business lowered losses related to stock. Operating profits improved by 158 billion won which helped the business mark 68.2 billion won profits.
The lubricant business suffered from poor sales in the US and Europe due to the pandemic. But oil prices dropping helped its margin for the business to post 37.4 billion won operating profits. Its oil development business marked 11.8 billion won in operating profit, down by 33.5 billion won from the previous quarter, due to lowered demand from the virus outbreak.
SK Innovation’s battery business marked operating loss of 113.8 billion won in the quarter, slightly down from the previous quarter, due to a one-time fee for implementation of a global management system but saw sales rise due to oversees factory beginning operations.
Its material business marked 43.7 billion won in operating profits from increase in sales of lithium-ion battery separators for electric vehicles (EV). Despite the pandemic, the global EV market was showing continued growth.