SK Enmove’s Q4 Base Oils Profit Rises to Near-Two-Year-High
Profit rises year on year for first time since first-half 2023
Lower crude oil prices and higher Group III prices extend recovery in margins
Base oils account for 5% of SK Innovation's revenue, but 61% of its profit
SK Enmove, the world’s largest producer of Group III base oils, reported a sharp rebound in fourth-quarter profitability, with earnings climbing to their highest level in almost two years as feedstock costs fell and sales prices and volumes rose.
The SK Innovation subsidiary posted an operating profit of 181 billion South Korean won ($125 million) in the three months to end-December, up 30% year on year and ending nine straight quarters of shrinking profit.
Key Highlights
· Fourth-quarter base oils sales reached 989.6 billion South Korean won, the highest since the third quarter of 2024.
· Sales rose 2% year-on-year, climbing for the first time since the beginning of 2023.
· Operating profit growth outpaced sales as crude prices fell around 15% during the fourth quarter.
· Lower feedstock costs contrasted with Group III prices, which rose 7% in Europe, outperforming other base oils grades.
· Fourth-quarter base oils profit margin climbed to 18.3%, the highest since the first quarter of 2024 and reflecting the Group III market’s steady recovery over the past year.
· Base oils sales accounted for just 5% of SK Innovation’s fourth-quarter revenue, but 61% of total profit, highlighting the outsized role of Group III base oils within its broader portfolio.
