SK Innovation says refining margins to gradually improve in Q2
SK Innovation Co Ltd, the owner of South Korea's top refiner SK Energy, said refining margins were likely to gradually improve in the second quarter due to recovering demand as the impact of COVID-19 eases.
The company posted an operating profit of 503 billion won ($444.88 million) in the January-March quarter, compared with an operating loss of 1.8 trillion won in the same period a year earlier.
Revenue declined 16% to 9.2 trillion won from a year earlier. That compares with the 9.9 trillion won forecast of analysts in the Refinitiv SmartEstimate. "Despite the resurgence of COVID-19 in some regions and countries, as vaccinations in the United States and Europe continue, expectations about demand recovery are growing," Lee Dong-yeol, the head of SK Energy's corporate planning office, said in a earnings conference call.
Lee added that refining margins, especially for gasoline, are expected to improve backed by the start of the U.S. driving season in May, while refining margins of jet fuel and diesel are expected to recover in the second half of the year when the United States is set to achieve a 50% vaccination rate.
SK Innovation, which has a total refining capacity of 1.115 million barrels per day (bpd) at plants in Ulsan and Incheon, said it operated at 63% of capacity on average in the first quarter, down from 89% during the same period a year earlier. ($1 = 1,130.6400 won) (Reporting by Heekyong Yang and Joyce Lee; Editing by Jacqueline Wong & Simon Cameron-Moore)
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