UpdateSK Energy eyes better Q4; gears for No 1 cracker restart

22 October 2010 10:35  [Source: ICIS news]

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SINGAPORE (ICIS)--South Korea’s SK Energy said on Friday it is looking at reactivating its idled cracker, while it expects its petrochemical business to perform better in the fourth quarter, after a dismal sequential performance in the three months to September.

The South Korean producer had not officially set a restart date for the 190,000 tonne/year cracker, but a company source who declined to be named said that plant operations would likely resume around end-November.

“We are preparing the operations of the [No 1] cracker,” said SK Energy spokesperson Taehoon Chung, when contacted by ICIS.

Chung said that the actual restart date of the cracker would depend on market conditions.

Meanwhile, SK Energy said its petrochemical business had an operating profit of  Korean won (W) 76.6bn ($67.6m) in the third quarter on revenues of W2,767bn, down a hefty 49% and 14%, respectively, compared to second quarter figures.

“The business’s weak profitability was largely due to weak performance of its aromatic products which take up more than 60% of its sales,” the company said in a statement.

But the uptrend of product prices since August bode well for the segment’s earnings in the fourth quarter, it said.

Despite weakness in petrochemical segment, SK Energy reported an overall third-quarter net profit of W343.8bn, up 36% year on year, with revenues rising 11% to W10,167bn.

Operating profit nearly quadrupled to W325bn due to the strong recovery of its petroleum business and favourable performance of its exploration and production business, the company said.

“In the upcoming 4th quarter, we expect the company’s performance to be further driven by favourable market conditions,” said Hyun-Chun Jung, head of treasury, finance & investor relations at SK Energy.

With additional reporting by Peh Soo Hwee, Felicia Loo and Liu Xin

($1 = W1132.69)

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By: Pearl Bantillo
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