Shown above is a chemical factory of SK Innovation in South Korea. The firm recorded strong performances in the first quarter of this year. Photo courtesy of SK Innovation

Korea’s top oil refiner chalks up solid performances in 2022

SK Innovation, a top-tier oil refiner in South Korea, announced on April 29 that the Seoul-based company had racked up the sales of 16.26 trillion won ($12.84 billion) in the first quarter of 2022, up 72.92 percent from a year ago.

The company also noted that it had almost tripled its operating profit to $1.3 billion during the first three months of 2022 year-on-year.

SK Innovation said that it had managed to bounce back thanks to the strong petroleum price.

“Compared to the operating loss of about KRW 1.7 trillion, affected by the COVID-19 pandemic in the Q1 2020, we have made a dramatic rebound even though it is momentary,” SK Innovation said in a statement.

“In terms of the operating profit, factors, such as the increase in the refining business’ inventory-related gains by the rise in oil prices and the sharp increase in the refining margin, and boosted earnings from the E&P business, have contributed to its increase.”

Despite the improved earnings, the rise in oil prices increased the net working capital. Due to the influence of the facility investment for the battery business, the net debt amounted to 10.4 trillion won.

SK Innovation said that the refining business had achieved an operating profit of 1.51 trillion won, a quarter-on-quarter increase by 1.29 trillion won, backed by the improved market conditions due to the bolstered refining margin.

In particular, the increased refining margin was driven by the disrupted global supply balance of the oil products and crude oil by the geopolitical issue, according to SK Innovation.

In the petrochemical business, SK Innovation turned around as it had recorded an operating income of 31.2 billion won from a deficit a quarter ago.

The lubricants business logged an operating profit of 211.6 billion won for a quarter-on-quarter decrease of 56.1 billion won due to the decreased margin caused by the steep increase in the production cost and decreased sales volume.

The battery business had an increase in its sales volume by orders from European clients and increased battery prices derived from the increased metal prices, SK Innovation said.

“Due to the unstable energy supply by the geopolitical issue, the rise in oil prices and improved refining margin contributed to improved earnings of all business areas, including the refining business. But, unstable management environment and high volatility of the market conditions have continued more than ever,” SK Innovation CFO Kim Yang-seob said.

“Despite the rapidly changing management environment, we will strive to accelerate the establishment of the circular economy, such as accomplishing the Net Zero and the plastic waste recycling business.”

Kevin Chung studied literature in Seoul. He is interested in various areas. He can be reached at or 82-2-6956-6698.