By Heekyong Yang and Joyce Lee
SEOUL (Reuters) -SK Innovation Co Ltd, proprietor of South Korea’s prime refiner SK Energy, stated on Monday it expects strong refining margins to proceed within the second quarter backed by agency demand.
The firm posted an working revenue of 625 billion gained ($454 million) for the January-March interval, versus a 375 billion gained revenue a 12 months earlier. That in contrast with a median analyst forecast of 466 billion gained.
First-quarter income fell 1.5% to 18.9 trillion gained from the identical interval a 12 months earlier.
“We expect to see solid refining margins in the second quarter backed by continued cuts by OPEC+ and improved travel demand,” SK Innovation stated in a press release.
The refiner stated it plans to hold out upkeep work for its No.4 crude distillation unit (CDU) within the second quarter.
Analysts say rising oil costs benefited the corporate’s petrochemical enterprise, serving to to offset losses from its battery unit SK On, which has been going through weaker electrical automobile (EV) battery demand.
SK On, which provides to Ford Motor (NYSE:) Co, Volkswagen (ETR:) and Hyundai Motor (OTC:) amongst others, widened its working loss to 332 billion gained within the first quarter from 18.6 billion gained within the earlier quarter as a result of fewer EV battery shipments.
SK On’s main automaker buyer Ford earlier this month stated it delayed the deliberate launches of three-row EVs in Canada and its next-generation electrical pickup truck inbuilt Tennessee. Ford executives have stated they won’t launch the following technology of EVs till its EV enterprise is worthwhile.
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Analysts famous that SK On, which at present produces solely pouch-type battery cells, ought to broaden its product lineup to higher meet the wants of automakers that are diversifying the adoption of EV battery varieties to decrease prices.
“SK On needs to secure new clients to make maximum use of its existing capacity as its current clients are struggling with weaker EV sales,” stated Cho Hyunryul, an anlyst at Samsung (KS:) Securities.
Last week, SK On’s cross-town rival LG Energy Solution stated it deliberate to minimise capital expenditure this 12 months as a result of slowing international EV demand, after reporting a 75% drop in quarterly revenue.
Shares in SK Innovation had been buying and selling up 1.6%, versus the benchmark ‘s 0.4% rise as of 0022 GMT.
($1 = 1,376.4300 gained)