SK Innovation expects refining margins to post steady Q4 growth

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SEOUL (Reuters) – SK Innovation Co Ltd, owner of South Korea’s top refiner SK Energy, said on Friday that refining margins in the fourth quarter are expected to post steady growth as COVID-19 recedes and demand returns.

The company posted an operating profit of 619 billion won ($528.95 million) in the July-September quarter, compared with an operating loss of 54 billion won in the same period a year earlier.

Revenues rose 48% to 12.3 trillion won from a year earlier. That compares with the 12.6 trillion won forecast of analysts in the Refinitiv SmartEstimate.

“The third quarter operating profit of petrochemical business edged up marginally as upward swing in crude prices and key product crack concentrated mostly in September,” SK Innovation said in a statement.

SK Innovation, which has a total refining capacity of 1.115 million barrels per day (bpd) at plants in Ulsan and Incheon, said it operated 68% of its capacity on average in the third quarter, down from 72% a year earlier.

Peer S-Oil Corp, whose main shareholder is Saudi Aramco (SE:2222), on Thursday estimated that Asia’s refining margins are expected to continue their uptrend in the fourth quarter as demand grows ahead of winter and COVID-19 restrictions ease.

($1 = 1,170.2500 won)