SK Innovation (096770) Q4 2024 earnings summary

Executive summary

• Completed merger with SK E&S (SKI E & S) in November 2024, consolidating the energy value chain and aiming for enhanced profitability through business synergies.

• Confirmed oil discovery in Vietnam Block 15-2/17, with 25% ownership and ongoing exploration and development projects.

• Board approved a dividend of ₩2,001 per share for FY2024, pending shareholder approval, with a commitment to increase returns post-2027.

Financial highlights

• Q4 2024 revenue rose by KRW 1,748.7 billion quarter over quarter to KRW 19,405.7 billion, driven by the SK E&S merger; full-year 2024 revenue reached KRW 74.7 trillion.

• Operating profit turned positive at KRW 159.9 billion in Q4 2024, a KRW 583.2 billion improvement from the previous quarter.

• EBITDA for Q4 2024 was KRW 873.2 billion, up KRW 713.6 billion sequentially.

• Non-operating income declined by KRW 994.3 billion quarter over quarter, resulting in a loss of KRW 1,300.6 billion due to FX losses and other factors; net loss before tax widened to KRW -1,140.7 billion.

• Total assets at Q4 end were KRW 110.6 trillion, with tangible and intangible assets up KRW 21.6 trillion year-over-year.

Outlook and guidance

• 2025 business environment expected to remain uncertain, but synergies from the merger and a full energy value chain are expected to drive growth.

• Refining margins expected to remain flat in 2025 despite increased non-OPEC+ production, supported by rising jet fuel demand.

• Battery business expects meaningful improvement in top and bottom lines in 2025, focusing on North American market expansion.

• Lubricants segment expects stable profitability in 2025 despite new capacity additions.

• CapEx for 2025 planned at KRW 6 trillion, with a focus on battery, E&S, and other strategic investments.