SK Energy has announced its Q2-09 earnings results. Amid continued volatile business environment and global economic slowdown, the South Korean major has recorded a rise in net income by 16% yoy due to the foreign exchange gain, despite of drop in operating profits.
Q2 revenue and operating profit decreased by 26% and 67% year-over-year(yoy) to KRW 8,928.7 billion and KRW 177.6 billion respectively, while net income increased by 16% to KRW 301.4 billion from the same period 2008. Revenue for the quarter declined by 26% yoy to KRW 8,928.7 billion due to a slowdown in the global marketplace and lower product prices caused by significantly lower crude oil prices.
Despite the increased petrochemical and E&P earnings, SK Energy’s operating profit for the 2nd quarter decreased by 67% yoy to KRW 177.6 billion, mainly due to weakness in the petroleum and lubricant businesses affected by depressed refining margins and reduced base oil margins respectively.
The quarter’s net income increased by 16% YoY to KRW 301.4 billion, mainly due to foreign exchange gain from strategic foreign exchange risk management and higher equity method earnings from the improved earnings generated by SK Energy’s subsidiaries, in particular SKEI, based in Singapore.
SK Energy’s financial stability continued to strengthen in the last quarter despite challenging business environments. The company’s debt-to-equity ratio decreased from 207% at the end of 2008 down to 184% at the end of 1st half this year. Net debt ratio of the company has also decreased from 85% to 77% for the same period.