SK Lubricants posted a 54% year-to-year increase in operating profit for the quarter ended March 31, according to results the company filed today.
The base oils and finished lubes unit of SK Innovation earned ₩212 billion (U.S. $168 million) for the first quarter, which also represented a drop of more than 20% from the fourth quarter of last year. Still, the Seoul-based refiner said it expects performance to remain strong for this year’s second quarter.
The results for the first three months of 2022 continued a trend of the past several quarters yielding year-to-year improvements. The unit earned ₩137 billion in the first quarter of last year.
Parent company SK Innovation’s analysis focused on comparing the latest period to the fourth quarter of 2021, when SK Lubricants earned ₩268 billion. The company said most of the decrease – ₩52 million – was due to a narrowing of margins resulting from steep increases in crude oil costs. Reduced sales volumes also ₩21 million.
The company said it expects to avoid further sequential decreases in operating profit in the second quarter as cost increases are passed onto customers. Like other base oil suppliers, SK has announced price hikes in recent weeks.
SK is one of four large base oil refiners in South Korea and is the world’s largest producer and merchant supplier of API Group III base stocks.