South Korean base oil refiner SK Energy reported an increase in operating profit for its lubricants segment for the quarter ending June 30, while refiner S-Oil reported a decline compared to the second quarter of 2007. Each company recorded growth in lubricants revenue for the quarter compared to year-earlier figures.
Seoul-based SK Energys lubricants division reported an 86 percent increase in operating income for the three months ending June 30, to 81 billion won ($80.4 million), up from 43.5 billion Korean won ($43.2 million) during the year-earlier period. SK attributed the growth to increased sales volume and higher product prices. First quarter shipping delays and the May 1 start-up of the SK-Pertamina joint venture base oil refinery in Indonesia contributed to the rise in sales volume, according to SK, while increased international base oil prices were reflected in product prices.
Revenue for SKs lubricants segment grew 72 percent to 478.9 billion won ($475.4 million) in the second quarter, up from 278.4 billion won ($276.4 million) during the year-earlier period. The new plant in Dumai, Indonesia, produces 7,650 barrels per day of Group III base oil. At its Ulsan, South Korea refinery, SK Energy has capacity to produce 16,000 b/d of Group III and 5,000 b/d of Group II base oils.
As a whole, SK Energy reported quarterly operating income of 532.4 billion won ($526 million), up 33 percent from 399.2 billion won in 2007s second quarter. The company recorded revenue of more than 12.1 trillion won ($12 billion) for the second quarter, up 77 percent from 6.9 trillion won ($6.8 billion) in the year-earlier period.
S-Oils lubricants division reported a 38.1 percent decline in operating income for the three months ending June 30, to 48 billion Korean won (U.S. $47.7 million), down from 77.6 billion won ($76.8 million) during the year-earlier period.
Revenue for S-Oils lubricants segment rose 42.9 percent to 401.9 billion won ($397.1 million) in the second quarter, up from 281.2 billion won ($277.8 million) during the year-earlier period. According to the companys investor relations presentation, a key driver for the lubricants business in the quarter was a strategic pricing increase in premium markets to reflect tight global supply and demand.
Headquartered in Seoul, S-Oil has capacity to produce 24,500 barrels per day of lubricant base oils, including 15,000 b/d of API Group II and 9,000 b/d of Group III.
As a whole, S-Oil posted quarterly operating income of 707.6 billion won ($698.4 million), up 116 percent from 327.6 billion won ($323.3 million) in the year-earlier period. The company recorded revenue of 6.5 trillion won ($6.4 billion) for the second quarter, up 80.3 percent from 3.6 trillion won ($3.5 billion) in the year-earlier period.