SK Innovation (096770) Q2 2026 earnings summary

Executive summary

• Q2 and H1 2026 saw strong revenue and operating profit growth across all energy businesses, with premium base oil and battery segments leading performance, despite ongoing geopolitical risks and market volatility.

• Major restructuring included the unwinding of the BlueOval SK JV with Ford, resulting in SK On fully owning the Tennessee factory and Ford the Kentucky factory, and the completion of the SK E&S merger, expanding the energy value chain.

• SK On completed an equity swap with EVE Energy, gaining full control of SKOJ and divesting EUE, enhancing business flexibility and profitability.

• Net income attributable to controlling interests was ₩1.18 trillion in H1 2026, reversing a net loss of ₩3.35 trillion in H1 2025.

• The business portfolio includes energy/chemicals, batteries/materials, and E&S (LNG, power, city gas, renewables), with all segments returning to profitability.

Financial highlights

• Q2 revenue rose to KRW 29,157.2 billion, up KRW 4,866.2 billion quarter-over-quarter and KRW 9,704.0 billion year-over-year; H1 revenue reached ₩53.4 trillion, up from ₩40.7 trillion in H1 2025.

• Operating profit increased to KRW 3,487.3 billion in Q2, up KRW 1,325.1 billion quarter-over-quarter and KRW 3,888.9 billion year-over-year; H1 operating income was ₩5.65 trillion, up from a loss of ₩432 billion in H1 2025.

• EBITDA reached KRW 4,252.9 billion in Q2, up KRW 1,317.6 billion quarter-over-quarter.

• Non-operating losses included PRS derivative valuation losses (KRW 1.2 trillion) and SKIET impairment losses (KRW 1.4 trillion).

• Net debt increased by KRW 1.1 trillion to KRW 23.7 trillion at Q2 2026 end.

Outlook and guidance

• Focus on strengthening electrification and total energy solutions post-merger, with continued investment in battery/ESS, LNG value chain, and renewables.

• Oil prices and refining margins expected to remain volatile due to geopolitical tensions and supply disruptions, but may ease in Q3 2026 with higher OPEC+ output.

• Battery profitability anticipated to improve further through JV-related cost savings and ongoing reductions.

• Power generation segment expects higher operating profit on maximized output during peak electricity demand.

• Ongoing portfolio optimization and cost control to support profitability.