SK Innovation Rallies After Quarterly Earnings Beat

By Kwanwoo Jun

SK Innovation shares rose sharply Friday, as investors cheered its above-consensus quarterly earnings and return to profit in the third quarter.

Shares of the South Korean energy company climbed 7.5% to close at 137,100 Korean won ($102.75), outperforming the benchmark Kospi's 1.1% gain.

The company said net profit quadrupled from a year earlier to KRW729.61 billion in the quarter ended September, well above the FactSet-compiled consensus forecast of KRW557.84 billion.

That followed three consecutive quarters of net losses.

Operating profit more than doubled for the quarter, though revenue fell 13% from a year ago.

The company's oil-refining and petrochemical units largely drove the solid result, supported by higher oil prices and wider refining margins.

Narrower losses at its battery business also helped improve earnings, which the company said reflected a U.S. tax credit of KRW209.9 billion for battery-making affiliate SK On.

SK On, which supplies batteries to Ford Motor, Volkswagen and Hyundai Motor, narrowed its operating loss to KRW86 billion in the third quarter from KRW132 billion in the second quarter.

SK executives said during an earnings conference call that SK On aims to turn profitable in the fourth quarter.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

November 03, 2023 03:46 ET (07:46 GMT)

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