SK Innovation: “Refining to remain strong in Q4” ... Financial stability takes priority for shareholder returns [Roundup 2]

[Financial News] SK Innovation Co., Ltd. forecast that solid results in its refining business would continue in Q4, after posting record quarterly operating profit of 3.7043 trillion won on revenue of 28.7738 trillion won in Q3 this year. This is because the burden of crude procurement costs has eased and refining margins on petroleum products remain strong. However, it cited a sharp drop in global oil prices and rising ocean freight rates as potential variables. Regarding expectations for shareholder returns following the improvement in results, the company said it would give priority to financial stability.■ Strong refining margins ... Q4 results also expected to remain solidAccording to SK Innovation Co., Ltd.’s Q3 earnings conference call on the 29th, SK Energy Co., Ltd. expected strong refining margins to continue in the second half of the year amid a global shortage of petroleum products. It said that export restrictions on petroleum products in major countries, scheduled maintenance at refineries and increased winter demand would support market conditions.
SK Energy Co., Ltd. posted operating profit of 1.2058 trillion won in Q3, up 554.6 billion won from the previous quarter. Supply of petroleum products declined due to lower refinery operating rates in the Middle East and Russia’s restrictions on diesel exports. Rising refining margins and increased operating rates following the completion of scheduled maintenance contributed to the improved results.
Joo Yeong-gyu, head of management planning at SK Energy Co., Ltd., explained, “The official selling price (OSP) of crude has fallen considerably, and refining margins are very strong, but freight rates have surged.” He added, “The crude oil arriving in Q4 will come with fairly low OSPs and freight rates that are somewhat contained, so we expect to maintain quite solid results unless oil prices plunge.”
However, he took a cautious stance on the oil market next year. With both further escalation of the conflict in the Middle East and the possibility of stabilization through negotiations still on the table, he expected volatility in global oil prices and refining margins to continue. Joo explained that the longer the situation in the Middle East continues, the less capacity there will be to absorb supply shocks through inventories and production.
Kixx, which operates the lubricants business, posted Q3 operating profit of 1.0906 trillion won, up 398.7 billion won from the previous quarter. Although this was a record quarterly result, it projected that current high spreads would gradually narrow if global disruptions to lubricant base oil supplies ease.
Kim Mi-gyeong, head of strategy planning at Kixx, said, “It will be difficult to achieve an operating profit at the same level as this year,” but added that the company would expand opportunities for new and long-term contracts based on its stable supply capabilities.■ LNG business results improve ... annual procurement of 6 million tonnes maintainedSK Innovation E&S, which operates the power and liquefied natural gas (LNG) businesses, also posted Q3 operating profit of 774.4 billion won, up 668.5 billion won from the previous quarter. The improvement was driven by a rise in the system marginal price (SMP) amid seasonal growth in power demand, imports of competitively priced LNG under long-term contracts, and securing volumes from test runs at Australia’s Barossa gas field.
SK Innovation E&S said it was maintaining annual LNG throughput of about 6 million tonnes despite supply uncertainty in the Middle East.
Kang Ryun-gwon, head of management planning at SK Innovation E&S, explained, “Even after the war in the Middle East, we have had no imports specifically from the region, so we are maintaining annual handling volumes of about 6 million tonnes.” He added that the LNG volumes secured are supplied to the company’s own demand centers.
Domestic power generation projects are also underway. A separate corporation was established for the Namyangju combined heat and power project, and construction began in Q3. Work is underway on heat-source facilities and LNG pipelines for the Yongin power project, which plans to begin supplying steam in Q4 next year.
The company is also reviewing shareholder return policies in light of improved results. SK Innovation Co., Ltd. said its net debt at the end of Q3 this year was 3 trillion won lower than at the end of last year. However, it has not finalized the amount or timing of any shareholder returns.
Seo Geon-gi, head of finance at SK Innovation Co., Ltd., said, “We will comprehensively review financial stability, the extent of profitability improvement, investment and funding needs, among other factors, before finalizing the shareholder return policy for fiscal 2026, and will communicate it once it is finalized.”

[email protected] Kim Mi-hee Reporter