WionDrive News Desk 
While announcing their upcoming targets for the second half of this year, SK Innovation Co Ltd and its subsidiary, SK On, are expecting to be in a breakeven position owing to an impressive first-quarter operating profit. On the following trading day, the stock market has revalued the company’s shares upside by more than 6.0%.
The South Korean conglomerate, through its subsidiary SK Energy, which still remains the leader in the national refining sector, forecasts significant robust refining margins to be realised in the quarterly report for the second quarter, primarily boosted by high demands.
During the timeframe of January-March, SK Innovation reported an operating profit figure of 625 billion won (USD 454 million), which happened to exceed that of the 375 billion won profit recorded the previous year. In contrast with the real analysts’ average forecast of 466 billion won, the actual figure recorded was 520 billion won. The revenue in first quarter of businesses declined about 1.5%, or 18.9 trillion won, in comparison with the same period the previous year.
SK On’s CFO, Kim Kyunghoon, noticed in a post-earning interview that there was a decrease in EV battery sales in the first quarter caused by customer inventory adjustments. But they forecast a good market with the launch of new EVs in North American and the demand will pickup.
The analysts emphasises the fact that a similar impact is felt when the oil prices rise: SK Innovation whose petrochemical business is doing just great provides offset to the company’s losses on SK On, a battery unit working amid declining demand for EV batteries. SK On, the leading automotive battery producer in Korea, showed an operating loss for the first quarter of the year at 332 billion won, compared to 18.6 billion won in the previous quarter, but all the efforts are made to reach breakeven in the second half of the year which is the target.
Kang Dong-jin, an analyst at Hyundai Motor Securities, mentioned that SK On, a battery shipper, may experience higher shipment of the electric vehicle batteries with key client Hyundai Motor due to the commencement of EV production in the United States to occur in the mid of this year. Nonetheless, experts feared the prospect of uncertainty regarding EV sales in the short-run because the market demand remains skewed towards gas-electric hybrid models.
