Seoul: SK Innovation Co., South Korea's leading refiner, announced on Thursday that its second-quarter net losses have widened compared to the previous year, largely due to declining oil prices and the appreciation of the won.
According to Yonhap News Agency, in the three months ending June 30, SK Innovation's net losses deepened to 1.03 trillion won (US$743.3 million) from 639.7 billion won in the same period last year, as revealed in a regulatory filing. The company attributed the net result to higher financial costs, declining oil prices, and the won's appreciation against the dollar, which subsequently lowered the valuation of dollar-denominated crude inventories. Operating losses also expanded significantly to 417.6 billion won in the second quarter, compared to 45.8 billion won a year ago.
Despite the increased losses, SK Innovation reported a 2.7 percent rise in sales on-year, reaching 19.3 trillion won from the previous 18.8 trillion won. The company remains optimistic about the future, anticipating improved refining margins, reduced U.S. tariff risks following negotiations with trade partners, and increased battery shipments to Europe to aid a rebound in third-quarter earnings.
Additionally, SK Innovation announced on Wednesday a merger between its electric vehicle battery-making unit, SK On, and SK Enmove Co., a provider of EV lubricants and thermal management solutions, as part of its business reorganization plan. For the first half of the year, net losses widened to 1.16 trillion won from 737.3 billion won in the same period last year, with the refiner swinging to an operating loss of 462.2 billion won from an operating profit of 578.89 billion won a year ago. Sales increased by 7.4 percent to 40.45 trillion won from 37.65 trillion won.