2018 1Q Earnings Release

Transcription

1 SK innovation Q Earnings Release

2 Disclaimer This presentation has been prepared and is presented by SK Innovation, based on the first quarter 2018 financial results, which was review by the independent auditors. This presentation contains forward-looking statements based on the estimates and forecasts by the management of SK Innovation. While the Company believes the estimates underlying the forecasts are reasonable, by their nature, such forward looking statements involve risk and uncertainty in the future business environment. The actual result may differ from those expressed in such statements due to a variety of factors.

3 Table of Contents 1Q 2018 Financial Results 1Q 2018 Business Highlights Recent Corporate Actions & Events Q&A Appendix

4 Sales & Operating Profit (Unit: KRW in Billion) 1Q18 4Q17 QoQ 2017 Sales 12, , ,260.9 Operating Profit ,234.4 EBITDA , ,134.5 Non-Operating Profit Pre-Tax Income ,234.8

5 Balance Sheet (Unit: KRW in Billion) 1Q Change from FY 2017 Assets 33, , Current assets 15, , Liabilities 14, , Debt (Net Debt) 5,192.4 (977.8) 5,578.1 (1,328.9) ( 351.1) Shareholders Equity 19, , Paid-in Capital Debt/Equity 74.7% 77.3% 2.6%p 4

6 Table of Contents 1Q 2018 Financial Results 1Q 2018 Business Highlights Recent Corporate Actions & Events Q&A Appendix

7 Refining Refining Margin ($/B) Dubai ($/B) 16.1Q 16.2Q 16.3Q 16.4Q 17.1Q 17.2Q 17.3Q 17.4Q 18.1Q High level of compliance with supply cut by OPEC and continued robust demand growth supported crude prices High level of compliance with ongoing supply cut by OPEC : 17.4Q: 115% 18.1Q: 151% (+36%p) ($/B) (5) (10) (15) Gasoline crack Diesel crack FO Crack 16.1Q 16.2Q 16.3Q 16.4Q 17.1Q 17.2Q 17.3Q 17.4Q 18.1Q Unseasonable winter weather and low inventories supported middle distillate crack Crack ($/B) 17.4Q 18.1Q QoQ Gasoline Diesel Fuel Oil

8 Refining Performance Analysis (Unit: KRW in Billion) Weaker refining margin and less inventory valuation gain q-o-q S GRM (Spot Margin) 17.4Q: $7.2/B 18.1Q: $7.0/B ( $0.2/B) Condensate premium 17.4Q: $1.4/B 18.1Q: $3.0/B (+$1.6/B) Change in crude price (QoQ) 17.4Q: +$7.9/B 18.1Q: +$1.1/B ( $6.8/B) 4Q17 4Q17 Operating 영업이익 Profit 마진효과 Margin 재고관련 Inventory 이익기타 1Q18 Others Effect Effect Operating 영업이익 Profit Refining margins expected to maintain at a stable level on robust demand growth Low inventory level of middle distillate to continue * Include SK IPC s refining business performance 7

9 Petrochemical Product Spreads ($/Ton) Naphtha Ethylene-Naph PE-Naph Strong olefin spread contributed by demand increase from inventory stocking prior to 2Q turnaround in the region 300 Spread ($/MT) 17.4Q 18.1Q QoQ Q 16.2Q 16.3Q 16.4Q 17.1Q 17.2Q 17.3Q 17.4Q 18.1Q C PE ($/Ton) 600 BZ-Naph PX-Naph Upward trend in aromatics spread due to demand from startup of new 400 PTA facilities and stronger SM demand 200 Spread ($/MT) 17.4Q 18.1Q QoQ Q 16.2Q 16.3Q 16.4Q 17.1Q 17.2Q 17.3Q 17.4Q 18.1Q PX BZ

10 Petrochemical Performance Analysis (Unit: KRW in Billion) Major product spread (PX, PE) showed stronger trend resulted in higher operating profit Solid demand for aromatics to offset inflow of olefin products, leading to stable market 4Q17 4Q17 Operating 영업이익 Profit 마진효과 Margin 물량효과 Volume Others 기타 1Q18 1Q18 Effect Effect Operating 영업이익 Profit PE : Strong inflow from outside Asia despite regional turnaround * Includes SK IPC s petrochemical business performance PX : robust downstream demand despite additional supply from new capa. addition 9

11 Lubricants Performance Analysis ($/Bbl) SN Gas Oil 150SN-G.O 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Spread marginally declined from rising oil price, resulting in increase of G.O price B.O Spread (150SN Gas Oil) 17.4Q: $22.2/Bbl 18.1Q $:22.1/Bbl( $0.1/B) (Unit: KRW in Billion) Operating profit declined QoQ due to reduced sales volume on seasonal factors and time lag effects of rising oil prices 영업이익 4Q17 3Q17 마진효과 Margin 물량효과 Volume 기타 4Q17 1Q18 Others Operating Profit Effect Effect Operating 영업이익 Profit 10

12 E&P Business (Unit: KRW in Billion, MBOE/D) 4Q17 1Q18 Sales Average daily production Peru Despite the rise in oil prices, operating profit fell q-o-q on decrease in sales volume due to the Peruvian Pipeline Trouble - Peru Vietnam SK E&P America 3 3 Oil Portion (%) 34% 37% Operating Profit (Q-o-Q) (Unit: KRW in Billion) Benchmark 17.4Q 18.1Q QoQ Brent ($/B) WTI ($/B) HH ($/mmbtu) Q17 매출변동비용효과기타 1Q18 Change in Sales Cost Effect Others Operating 영업이익 Profit Operating 영업이익 Profit 11

13 I/E Materials Business* (Unit: KRW in Billion) Decrease in operating profit from discontinued operations resulted from disposal of FCCL business Q17 Operating 영업이익 Profit Discontinued 중단사업 Business, 효과등 etc 판매증가 Volume Effect 기타 Others 1Q18 Operating 영업이익 Profit Line #10, #11 started commercial production - Annual production capa. : 360 m2 * Excluding Battery business earnings 12

14 Table of Contents 1Q 2018 Financial Results 1Q 2018 Business Highlights Recent Corporate Actions & Events - Withdrawal of SKL IPO plan - Announcement of Share Buyback Q&A Appendix

15 Withdrawal of SKL IPO Plan & Share Buyback Withdrawal of IPO Plan Submission of application to withdraw its plan to list SK Lubricants, in consideration of a variety of factors that are difficult to determine the fair value of the Company after the book building process (Apr. 27) Share Buyback Program Approval by the Board on share buyback of c. 1 trillion KRW to enhance shareholder value (Apr. 30) Share buyback program Number of Shares to be Acquired(Shr.) Estimated Acquisition Amount (KRW) Scheduled Acquisition Period 5,208 thousand shares (at 4/27, closing price) c. 1 trillion KRW ~ 8. 1 (3 months)

16 Table of Contents 1Q 2018 Financial Results 1Q 2018 Business Highlights Recent Corporate Actions & Events Q&A Appendix

17 Table of Contents 1Q 2018 Financial Results 1Q 2018 Business Highlights Recent Corporate Actions & Events Q&A Appendix

18 1. Business Performance (excluding intercompany transactions) (Unit: KRW in Billion) Refining Petchem Lube E&P Others 18. 1Q Sales 8, , ,166.1 Operating Profit Non-operating profit Pre-tax Income * Refining: SKE, SKTI, SKIPC-Refining / Petchem : SKGC, SKIPC-Petchem 17

19 2. Utilization Rate Petroleum/Petrochemical Plants Petroleum Plant 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 CDU 90% 84% 85% 83% 91% 81% 94% 93% 88% Ulsan 92% 85% 91% 91% 94% 79% 95% 94% 89% Incheon 83% 81% 67% 58% 82% 89% 89% 91% 86% HOU 91% 98% 100% 100% 92% 98% 100% 100% 81% #1 RFCC 100% 100% 100% 100% 99% 64% 97% 100% 100% #2 RFCC 100% 100% 100% 58% 100% 100% 100% 100% 100% Petrochemical Plant 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 NCC 100% 100% 86% 75% 99% 100% 100% 100% 100% PE 98% 98% 84% 72% 97% 98% 98% 99% 99% PP 100% 100% 86% 78% 100% 100% 99% 99% 100% PX 100% 89% 100% 90% 100% 83% 100% 100% 100% 18