Korea’s top oil refiner SK Innovation on Friday reported a 6.5 percent increase in net profit in the second quarter led by its petro-chemical business.

Its net profit reached 626 billion won ($551 million), compared with 588 billion won a year earlier, the company said.

Operating income rose 12 percent to 1.12 trillion won and sales jumped 21 percent to 10.28 trillion won.

The company attributed the strong performance to its petro-chemical business which benefited from lower oil prices. 

Its chemicals unit and lubricant business racked up record operating incomes of 303 billion won and 133 billion won, respectively, in the second quarter.

Its refining business posted an operating profit of 705 billion won.

In 2014, SK Innovation fell into the red for the first time in 37 years as a sharp fall in oil prices hurt the value of its crude stock-piles and cracking margins.

The company swung to a net profit in 2015 on improved margins and reduced inventory losses.

The market conditions would remain favorable in the latter half because refining margins in the oil business are projected to recover, the company said.

“The operation rate of crude distillation units slipped in June due to the maintenance, but there are no more factors to halt the units this year,” said business plan chief Lee Yoon-hee in a conference call, adding, “We plan to operate the units at full capacity because the margins of international oil products are predicted to be high.”

The official also noted the future business strategy of the assembly lines for LiBS, or Lithium-ion battery separator, which is in full operation. LiBS are materials used for electric car and smartphone batteries

“When two more LiBS assembly lines are added in 2018, the production capacity will be 330 million square meters. We will push for the addition in line with market conditions,” the official said.

Early in April, SK Innovation said the company plans to add 10 and 11 new assembly lines for LiBS. 

(theinvestor@heraldcorp.com)