SK Innovation Co., Ltd · KRX:096770

SK Innovation — SK — Q3 2006 Earnings Presentation

37 slides from SK Innovation's earnings presentation, Oct 24, 2006

  1. Slide 1: 2006 3Q Earnings Release

    2006 3 2006. 10. 24 Wp SK ‘corporation SK

  2. Slide 2: 2006 · . , .

    2006 3 · . , .

  3. Slide 3: Contents

    1. 2006 3 2. 2006 3 3. SK New RFCC 4. Appendix

  4. Slide 4: 1. 2006 3Q Results

    1.2006 3 SK

  5. Slide 5: Consolidated results summary

    2006 YoY 3Q05 FY2005 1Q06 2Q06 3Q06 YTD (3Q06-3Q05) 57,549 219,146 52,777 57,486 65,147 175,410 13% 3,331 12,049 3,300 3,071 3,495 9,866 5% 1,766 10,052 4,268 954 975 6,197 -45% 5,097 22,101 7,568 4,025 4,470 16,063 -12%

  6. Slide 6: Sales by segment

    2006 YoY 3Q05 FY2005 1Q06 2Q06 3Q06 YTD (3Q06-3Q05) 41,680 157,426 38,135 40,867 45,284 124,286 9% 12,288 48,252 11,330 13,232 15,655 40,217 27% 991 3,354 751 863 958 2,572 -3% 1,736 6,769 1,746 1,915 2,628 6,289 51% 854 3,345 815 609 622 2,046 -27% 57,549 219,146 52,777 57,486 65,147 175,410 13%

  7. Slide 7: Operating income by segment

    2006 YoY 3Q05 FY2005 1Q06 2Q06 3Q06 YTD (3Q06-3Q05) 1,219 4,586 1,566 1,126 966 3,658 -21% 1,069 4,277 894 1,100 1,394 3,388 30% 689 2,096 477 584 628 1,689 -9% 295 1,015 330 288 562 1,180 91% 59 75 33 -27 -55 -49 n/a 3,331 12,049 3,300 3,071 3,495 9,866 5%

  8. Slide 8: Non-operating income and net income

    2006 3Q05 FY2005 1Q06 2Q06 3Q06 YTD -537 -2,024 -682 -774 -817 -2,273 -242 534 737 340 222 1,299 1,706 7,266 4,082 1,521 1,858 7,461 839 3) 4,276 131 -133 -288 -290 1,766 10,052 4,268 954 975 6,197 1) ’06 3 :- 15.1/US$ ( 960.3/US$ 945.2/US$ ) 2) ’06 3 : SK (429 ), SK (45 ) 3) : EB 1,345

  9. Slide 9: Financial position

    2005. 12 2006. 6 2006. 9 175,092 187,183 193,913 93,986 104,974 109,703 (55,728) (64,454) (65,170) 81,106 82,209 84,210 (6,534) (6,534) (6,534) 115.9% 127.7% 130.3% 54.4% 72.8% 73.8%

  10. Slide 10: Debt and net debt

    2005. 12 2006. 6 2006. 9 9,828 11,613 12,113 45,900 52,841 53,057 55,728 64,454 65,170 2,500 800 2,150 58,228 65,254 67,320 14,120 5,377 5,146 44,108 59,877 62,174

  11. Slide 11: 2. 2006 3Q SK Business Review

    2. 2006 3 SK

  12. Slide 12: Crude oil price and cracking margin

    ( ) (US$/B) 70 8 ‰ : 65 R/M(RHS) 7 - - FO FO/Dubai spread 60 6 - Ethylene Cracker 55 5 Naphtha/Dubai spread 50 4 ‰ Cracking : 45 3 < , , spread > 40 2 (US$/B) 35 1 Dubai Dubai FO/ Gasoline Diesel/ Price R/M Dubai / FO FO 30 0 3Q05 55.3 -0.6 -10.1 26.2 26.7 25 -1 2Q06 64.8 0.8 -12.2 30.3 31.7 3Q06 65

  13. Slide 13: Product spreads vs Dubai

    ( ) / (Spread) Spread 27 (US$/B) 25 ‰ Diesel/Dubai spread: 23 - , 21 19 - 17 - 15 13 ‰ Naphtha/Dubai spread: 11 9 - Ethylene Cracker 7 - 5 - 3 1 (1) ’04 ‘05 ‰ FO/Dubai spread: (3) ‘06 - Arbitrage FO (5) - FO (7) (9) - FO (11) < Arbitrage , FO/Dubai spread > (13) mn Ton, US$/B 7 8 9 (15) (17) Arbitra

  14. Slide 14: Refining operations and CDU utilization

    ( ) (3Q) (3Q) ‰ - CDU : 90% (3Q05 86%) No. 4 CDU (240 MB/D) shut-down: 6/13~7/10 - RFCC/ HOU : 100% ‰ - , ,

  15. Slide 15: Petroleum product demand

    ( ) ( , ) ‰ (Gasoline): - , ‰ (Kerosene): - ‰ (Jet oil): - ‰ (Diesel): - ‰ Fuel Oil (Bunker-C): - (mn B)

  16. Slide 16: Olefin spreads

    NCC , tight spread Olefin spread Spread ‰ spread ( ) (US$/Ton) (US$/Ton) 900 800 700 600 500 Cracker NEA cap. 22% shut-down (8 ~10 ) 400 300 200 100 Ethylene-Naph Propylene-Naph PP-Naph ‰4 spread : NCC shut-down 0 1 2 3 4 5 6 7 8 9 10 1112 1 2 3 4 5 6 7 8 9 10 1112 1 2 3 4 5 6 7 8 9 10 3Q ’04. ’05.

  17. Slide 17: Aromatics spreads

    PX,SM spread Aromatic Spread Spread (US$/Ton) ‰ spread ( ) (US$/Ton) 1,200 PX-Naph SM-Naph BZ-Naph Spread 3Q05 2Q06 3Q06 Benzene 276 277 310 1,000 PX 356 509 787 SM 530 547 654 800 - BZ: 600 - PX: tight emergency shut-down tight - SM: End-user spot , 400 spread 200 ‰ Reformate ( ): (US$/B) Reformate

  18. Slide 18: Plant operation

    Plant Operation ‰ ( ) NRC (New Reforming Center) 2,250 (K Ton) 2,000 1,750 1,500 1,250 * : ’06. 5 1,000 ‰ ( /PE,PP) 750 500 250 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q ’04. ’05. ’06. Source: Company

  19. Slide 19: Plant operation

    ( ) (%) ‰ 800 70 700 600 60 500 ‰ 50 400 300 40 200 30 100 3 0 20 1Q 2Q 3Q 4Q 1Q 2Q 3Q : 8 ( 50%) ’05. ’06.

  20. Slide 20: Revamping

    ‰ Revamping Tight ‰ Revamping Capacity Æ (M B) 1Q 2Q 3Q 4Q 1Q 2Q 3Q ’05. ’06.

  21. Slide 21: 3. SK New RFCC

    . SK New RFCC SK

  22. Slide 22: New RFCC overview

    De SK corporation De SK incheon oil SK

  23. Slide 23: New RFCC Plant

    1 6,500 SK New RFCC Plant ’05. 6 RHDS RHDS Reactor : Reactor ’08.6 : 2005 6 Scheme JSW Kobe : 2008 3 RHDS 80 MB/D & RFCC 60 MB/D

  24. Slide 24: Feedstock and RHDS

    Feedstock Feedstock ‰ RHDS HSFO 1000 ‰ SK RFCC Feedstock , Alkylate ‰ HSFO 1000 (10 ppm ) HSFO 380 ‰ gasoline / fuel oil spread HSFO 380 (HSFO 1000 ) (Alkylation, GDS, PRU ) * GDS : Gasoline De-Sulfurization * HSFO 1000 : High Sulfur Fuel Oil with viscosity of 1000 PRU : Propylene Recovery Unit

  25. Slide 25: New RFCC investment and schedule

    SK RFCC SK RFCC ‰ SK SK 2,000 , + 16,000 18,000 ‰ RHDS Reactor RFCC – 9,000 52 + 620 , , 2008 3 , 2008 6 9,620 ’06 ‰ RHDS Reactor ‰ SK RFCC , 4 (JSW, Kobe, Creusot, Vienna) 2010

  26. Slide 26: SK

    SK

  27. Slide 27: Appendix

    Appendix 1. ( ) 2. / PLANT 3. ( / ) 4. /

  28. Slide 28: Product demand

    1. ( ) ( : / ) Diesel FO Kero Gasoline ’03. ’04. ’05. ’06. Source: KNOC

  29. Slide 29: Plant operations and shutdowns

    2. / Plant (SK Corp) ‰ Plant * CDU: 840,000 b/d, HOU 45,000 b/d, RFCC 57,000 b/d ‰ Plant * (5 ~6 ) ** (8 ~9 )

  30. Slide 30: 3-A.

    3- A.

  31. Slide 31: 3-B.

    3- B.

  32. Slide 32: 4-A. Income statement

    4-A. ( : ) YoY 3Q05 FY2005 1Q06 2Q06 3Q06 2006 YTD (3Q06-3Q05) 57,549 219,146 52,777 57,486 65,147 175,410 13% 51,731 195,895 46,999 51,833 58,737 157,569 14% 5,818 23,251 5,778 5,653 6,410 17,841 10% 2,487 11,202 2,478 2,582 2,915 7,975 17% 3,331 12,049 3,300 3,071 3,495 9,866 5% 4,434 18,711 6,586

  33. Slide 33: 4-B. Segment results

    4-B. – ( : ) YoY 3Q05 FY2005 1Q06 2Q06 3Q06 2006 YTD (3Q06-3Q05) 41,680 157,426 38,135 40,867 45,284 124,286 9% 38,912 145,956 35,056 38,137 42,467 115,660 9% 2,768 11,470 3,079 2,730 2,817 8,626 2% 1,549 6,884 1,513 1,604 1,851 4,968 19% 1,219 4,586 1,566 1,126 966 3,658 -21%

  34. Slide 34: 4-C. Segment results

    4-C. – ( : ) YoY 3Q05 FY2005 1Q06 2Q06 3Q06 2006 YTD (3Q06-3Q05) 12,288 48,252 11,330 13,232 15,655 40,217 27% 10,826 42,265 10,001 11,693 13,791 35,485 27% 1,442 5,987 1,329 1,539 1,864 4,732 29% 373 1,710 435 439 470 1,344 26% 1,069 4,277 894 1,100 1,394 3,388 30%

  35. Slide 35: 4-D. Segment results

    4-D. – ( : ) YoY 3Q05 FY2005 1Q06 2Q06 3Q06 2006 YTD (3Q06-3Q05) 991 3,354 751 863 958 2,572 -3% 271 1,128 245 253 294 792 8% 720 2,226 506 610 664 1,780 -8% 31 130 29 26 36 91 16% 689 2,096 477 584 628 1,689 -9%

  36. Slide 36: 4-E. Segment results

    4-E. – ( : ) 2006 2006 3Q05 FY2005 3Q06 3Q05 FY2005 3Q06 YTD YTD 1,736 6,769 2,628 6,289 854 3,345 622 2,046 1,311 5,136 1,895 4,625 391 1,410 290 1,007 425 1,633 733 1,664 463 1,935 332 1,039 130 618 171 484 404 1,860 387 1,088 295 1,015 562 1,180 59 75 -55 -49

  37. Slide 37: SK

    SK

SK — Q3 2006 Earnings Presentation on 6ix