Q3 sales reach 28.77 trillion won, up 40% on-year

Tight global petroleum supply boosts export margins

Lubricants unit achieves all-time quarterly high

SK Energy, SK Enmove each top 1 trillion won in operating profit

An aerial view of SK Innovation's Ulsan CLX complex. [SK Innovation]
An aerial view of SK Innovation's Ulsan CLX complex. [SK Innovation]

SK Innovation posted a record quarterly operating profit in the third quarter, driven by improved profitability in petroleum product exports and strong results from its lubricants business.

The company said Thursday it achieved sales of 28.77 trillion won ($21.5 billion) and operating profit of 3.7 trillion won in the third quarter of 2026.

Sales rose 39.7 percent from a year earlier, while operating profit surged 532.5 percent. Compared with the previous quarter, sales edged down 1.3 percent while operating profit grew 6.2 percent.

The strong quarterly performance was driven by tightening global petroleum product supply — stemming from reduced refinery utilization in the Middle East and Russia's restrictions on diesel exports — which pushed export margins higher. The lubricants unit further boosted results by achieving an all-time quarterly operating profit record amid disruptions to global base oil supply.

In the petroleum business, continued global supply disruptions coincided with rising demand for transportation fuels during the summer driving season, strengthening international petroleum product prices and refining margins.

Benefiting from the resulting improvement in export profitability, SK Energy recorded third-quarter sales of 15.93 trillion won and operating profit of 1.21 trillion won. SK Energy's third-quarter operating profit rose 554.6 billion won from the previous quarter.

SK Enmove posted sales of 2.37 trillion won and operating profit of 1.09 trillion won, as high base oil spreads persisted amid global lubricant base oil supply disruptions. SK Enmove's third-quarter operating profit increased 398.7 billion won quarter-on-quarter, surpassing the company's previous all-time annual operating profit record of 1.07 trillion won set in 2022.

Among other subsidiaries, SK Geocentric posted operating profit of 86.7 billion won; SK Incheon Petrochem, 270.3 billion won; SK Earthon, 31.4 billion won; SK On (battery business) recorded an operating loss of 80.5 billion won; SK On Trading International posted operating profit of 351.8 billion won; SK ie technology recorded an operating loss of 36.8 billion won; and SK Innovation E&S posted operating profit of 774.4 billion won.

SK Geocentric saw its operating profit rise 43 billion won from the previous quarter, as scheduled maintenance at regional paraxylene (PX) facilities and rising demand for aromatic feedstocks for gasoline blending — driven by strong gasoline prices — tightened product supply and widened PX and benzene (BZ) spreads.

SK Earthon maintained solid earnings momentum in the third quarter, supported by a recovery in sales volumes and firm international oil and gas prices. SK On's battery business saw both sales and operating profit decline quarter-on-quarter due to lower sales volumes and a base effect from one-time gains recognized in the prior quarter.

SK Innovation E&S improved power plant utilization and profitability as seasonal increases in electricity demand lifted the system marginal price (SMP), while the company stably secured LNG volumes through competitive long-term contracts and commissioning output from the Barossa gas field in Australia. Operating profit rose 668.5 billion won from the previous quarter.

Looking at the fourth-quarter outlook by business, the chemicals segment expects downstream product demand to soften, though a mild uptick is anticipated due to supply shortfalls from scheduled regional PX facility maintenance and the resumption of arbitrage flows to the United States.

In the lubricants business, spreads are expected to gradually narrow as global base oil supply disruptions ease, though profitability is forecast to remain solid even after supply conditions normalize, given the growing need for procurement source diversification. The oil and gas exploration business anticipates volatility in international oil and natural gas prices, and plans to maintain daily output and secure profitability through stable production operations at its China block and additional production well drilling at its Vietnam block.

The battery business expects a gradual sales recovery in the fourth quarter as key customers increase order volumes, though market uncertainty remains, and the company will continue optimizing production and supply operations while pursuing company-wide cost reductions. The power and LNG business anticipates margin pressure from a seasonal decline in electricity demand weighing on SMP and elevated LNG spot prices, and plans to manage earnings volatility accordingly.

"Uncertainty and price volatility in energy markets continue amid global geopolitical instability," an SK Innovation official said. "We will do our utmost to ensure a stable domestic supply of petroleum products and other energy, while continuing efforts to improve operational efficiency and strengthen core competitiveness across our businesses."


keg@heraldcorp.com