SK Innovation Co. recently announ-ced its consolidated 2011 financial statement including SK Energy’s crude oil drilling operations, showing total sales revenue of 68.375 trillion won, operating profit of 2.848 trillion won, and net profit of 3.18 trillion won.

The annual sales figures are up 27 percent and operating profit is up a whopping 51 percent YoY, thanks to the all-time high figures reported by its affiliates including SK Integrated Chemical, SK Lubricants and all other areas of its operations except SK Energy, the company said.

The company has attributed its excellent performance to the rapid decision making of each affiliate due to their independent management and flexible operations, which are more responsive to the changing business environment despite the uncertainty of the world financial market brought on by the EU debt crisis.

Following is a look at each affiliate’s performance in the first quarter of 2012:

SK Innovation

SK Innovation’s E&P business recorded revenue of 251.4 billion won and operating profit of 126.6 billion won during its fiscal first quarter ended March 31, 2012. Operating profit increased significantly from the previous quarter because one-off expenses such as an impairment loss on the exploration block were accounted for in the previous quarter. 

During the first quarter, average daily production remained at a similar level to the previous quarter, appro-ximately 63,000 barrels of oil equivalent per day (BoE/D). Slightly lower production in the company’s Peru and Vietnam blocks was offset by increased production at its LNG plant in Yemen, keeping overall production stable. 

SK Innovation’s E&P business will continue developing its exploration blocks, such as the Columbia CPO-4 and SSJN-5 blocks, during the second quarter.

SK Energy

SK Energy, the company’s petroleum business, recorded revenue of 14.380 trillion won and an operating profit of 574.8 billion won in the first fiscal quarter.

SK Energy’s operating profit in the first quarter grew significantly, up 400.1 billion won from the previous quarter. The main reasons include improved refining margins, the dissipation of pension plan-related one-off expenses, and inventory-related gains from higher oil prices. 

Oil prices continued an upward trend during the first quarter due to escalating geopolitical risks in Iran and production setbacks in other oil states in the Middle East. However, oil prices have recently eased a little owing due to reduced concerns about supplies, and are forecast to remain stable during the second quarter. 

 SK Global

SK Global Chemical, the petrochemical business, recorded revenue of 3.442 trillion won and an operating profit of 181.9 billion won in the fiscal first quarter.

SK Global Chemical’s operating profit increased by 89.7 billion won from the previous quarter. The increase included offsetting factors such as the dissipation of one-off expenses from the previous quarter and decreased supply owing to the regional maintenance season and equipment troubles.

SK Global Chemical forecasts improved olefin spreads from the eventual mitigation of China’s retrenchment policy and its lowered cash reserve ratio. However, the PX spread and prices are expected to remain at a slightly lower level due to slower operations at the PTA plant as a result of delayed recovery of China’s polyester demands. 

SK Lubricants

SK Lubricants recorded revenue of 737.4 billion won in Q1. Operating profit came in at 100.0 billion won in the first quarter, up 8.7 billion won from the previous quarter.