PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩9,000 per share · Prices as of the 2026-10-02 close
As SK Gas reshapes its portfolio through the KRW 1.2242tn sale of a minority stake in Ulsan GPS and the absorption of SK Advanced, the swing to a quarterly operating loss in Q2 2026 has put earnings volatility at the centre of the debate.
In 2025, consolidated revenue reached KRW 7.68tn with operating profit of KRW 442.8bn (5.8% margin), up from KRW 7.10tn and KRW 287.2bn (4.0%) in 2024, improving both scale and margin.
Quarterly swings are wide: operating profit of KRW 227.7bn and owners' net profit of KRW 259.8bn in Q1 2026 flipped to an operating loss of KRW 43.9bn and a net loss of KRW 36.5bn in Q2 2026.
SK Gas transferred a 49% stake in Ulsan GPS to STIC-Korea Investment Infra for about KRW 1.2242tn while keeping 51% and its position as largest shareholder (closed 30 June 2026).
For the SK Advanced merger, the shareholder record date is 10 September and the merger date 4 November, and it is a no-new-share structure, so existing shareholders' stakes are unchanged.
The debt-to-equity ratio fell from 175.3% in 2024 to 155.4% in 2025, and 2025 operating cash flow was KRW 672.6bn. The company said it is reviewing a renewal of its 2027-2029 mid-term shareholder-return policy.
SK Gas is an energy company whose core business is LPG importing, distribution and trading built over some four decades, and in recent years it has widened its axis into LNG and power generation.
Ulsan GPS, which began commercial operation in December 2024, is the world's first GW-class combined-cycle plant able to run on both LNG and LPG, built with about KRW 1.4tn of investment, completing a value chain from LNG procurement to storage, supply and generation.
Capacity is 1.2GW and the plant is supplied with roughly 0.9-1.0mn tonnes of LNG a year from Korea Energy Terminal (KET). The company says LNG is the primary fuel but LPG can be substituted when LNG prices exceed LPG prices, giving it fuel-switching room.
The petrochemical axis is SK Advanced, spun off in 2014, which takes propane sourced overseas by SK Gas and converts it into propylene via PDH, with 600,000 tonnes of annual capacity in Ulsan and about 506,000 tonnes produced in 2025.
The merger aims to put the propane-propylene value chain under a single management system so that sourcing, production and sales strategies can be run in an integrated way.
Korea's LPG import and distribution market is effectively split between SK Gas and E1, while the power unit is exposed to the spread between system marginal price and fuel cost and the chemical unit to propylene spreads.
As LPG sourcing shifted toward US shale, the joint-venture structure once built to secure Middle Eastern cargoes lost strategic importance and the company unwound the related stakes. Segment revenue mix could not be verified in a citable, disclosed form, so it is described only qualitatively here.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩1.9T | ₩120.7B | 6.4% |
| 2025Q3 | ₩2T | ₩173.5B | 8.9% |
| 2025Q4 | ₩2T | ₩35.8B | 1.8% |
| 2026Q1 | ₩2.6T | ₩227.7B | 8.6% |
| 2026Q2 | ₩2.3T | -₩43.9B | −1.9% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩8.1T | ₩390.5B | ₩257.1B | 4.8% | 11.0% | 149.1% |
| 2023 | ₩7T | ₩303.6B | ₩316.3B | 4.3% | 12.3% | 135.0% |
| 2024 | ₩7.1T | ₩287.2B | ₩178.8B | 4.0% | 6.6% | 175.3% |
| 2025 | ₩7.7T | ₩442.8B | ₩235.2B | 5.8% | 8.0% | 155.4% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04
On an annual basis, revenue and operating profit ran KRW 8.07tn/390.5bn in 2022, KRW 6.99tn/303.6bn in 2023, KRW 7.10tn/287.2bn in 2024 and KRW 7.68tn/442.8bn in 2025, so operating profit troughed in 2024 and grew again. The operating margin moved from 4.8% (2022), 4.3% (2023) and 4.0% (2024) to 5.8% in 2025.
Net profit attributable to owners, by contrast, fell from KRW 316.3bn in 2023 to KRW 178.8bn in 2024 before recovering to KRW 235.2bn in 2025, a different path from operating profit, suggesting derivative, financial and equity-method items amplify bottom-line swings.
Operating cash flow was volatile as well - KRW 140.1bn in 2022, KRW 617.2bn in 2023, KRW 373.3bn in 2024 and KRW 672.6bn in 2025 - though recent levels are stronger.
By quarter, revenue and operating profit of KRW 1.88tn/120.7bn in Q2 2025 and KRW 1.95tn/173.5bn in Q3 2025 collapsed to KRW 2.02tn/35.8bn in Q4 2025, with an owners' net loss of KRW 15.7bn.
In Q1 2026, revenue of KRW 2.64tn, operating profit of KRW 227.7bn and owners' net profit of KRW 259.8bn left the bottom line above operating profit, and DS Investment & Securities said in a May 2026 report that pre-tax profit had already exceeded the prior full-year level on a sharp rise in derivative-related gains.
In Q2 2026, however, revenue of KRW 2.31tn came with an operating loss of KRW 43.9bn and an owners' net loss of KRW 36.5bn, far below the FnGuide consensus of KRW 148.9bn operating profit, and the shares fell more than 10% in early trade after the release.
Summed over the four quarters from Q3 2025 to Q2 2026, owners' net profit was about KRW 319.7bn, so the annual earnings base held even as quarterly signs alternated.
At end-2025, total equity was KRW 3.14tn (owners' KRW 2.93tn, non-controlling KRW 216.5bn) and total liabilities KRW 4.89tn, for a debt-to-equity ratio of 155.4%.
LPG distribution is a classic cost-pass-through business whose margin hinges on international propane and butane prices (Saudi CP), the won exchange rate and freight, so profit can wobble even when revenue rises if volumes shrink.
The power unit is driven by the gap between system marginal price and fuel cost, maintenance scheduling and electricity sales volume.
DS Investment & Securities said in a May 2026 report that SMP was rising further in the second quarter with no maintenance plan like the prior year's, yet the reported Q2 2026 consolidated result was an operating loss, showing how hard it is for power, trading and chemicals to offset one another.
In petrochemicals, large Chinese capacity additions kept propylene in oversupply, leaving SK Advanced with operating losses for four straight years from 2022 to 2025, with the 2025 loss widening to KRW 140bn from KRW 116.1bn.
That said, some indicators improved in 2026, though analysis suggests the main driver was price gains from feedstock supply disruption in the Middle East.
On the demand side, the company has framed a "Next GPS" strategy around stable power supply for the spread of AI data centres and an expanded global gas sourcing network, making shifts in power demand a key swing factor for utilisation of its generation assets.
Domestically, the LPG import and distribution duopoly with E1 persists, while owning generation and LNG infrastructure gives SK Gas a profit mix unlike a pure distributor.
In cycle terms, three different phases sit inside one company: sourcing realignment in LPG, second-year normalisation in power, and oversupply in petrochemicals.
The most clearly confirmed change is capital reallocation. The transfer of the 49% Ulsan GPS stake raised about KRW 1.2242tn while the company kept 51%, and it said the proceeds will go into future growth investment and financial soundness.
According to Korea Ratings, the inflow cut parent-only net borrowings 47.4% from KRW 2.3645tn at end-2025 to KRW 1.2437tn at end-June 2026, with parent-only cash and equivalents of roughly KRW 1.8tn. The next step is the merger.
Small-scale and simplified merger rules apply, so board resolutions substitute for shareholder-meeting approval at both companies, and after completion a 600,000-tonne PDH business enters SK Gas's parent-level portfolio directly.
The same analysis estimated simple-combined total borrowings of KRW 3.5412tn and a 131.2% debt-to-equity ratio, both higher than parent-only levels.
Strategically, direct LNG imports, terminal utilisation and bunkering are to be pursued while minimising large new capex, using KET's existing tanks and berths to diversify demand across power, industry and marine fuel.
On returns, the company disclosed in March 2026 that it met high-dividend-company criteria along with a corporate value-up plan, and said it is reviewing a revamp of the 2027-2029 mid-term shareholder-return policy for announcement once finalised.
From a credit perspective, it was projected that financial stability will hinge less on the merger itself than on whether PDH earnings keep improving and how fast new-business investment is executed.
The shares trade at a discount to disclosed net asset value, below one times on both our own calculation basis and the Korea Exchange's published basis. Because the book value per share differs between those two bases, however, the multiple shown on screen also varies with the calculation method.
Earnings-based multiples swing widely depending on the reference period, since the sign of quarterly profit changes often - Q1 and Q2 2026 pointed in opposite directions.
On dividends, the per-share cash payout from the latest closing has been maintained and the yield sits above the market average, and with the company having disclosed that it meets high-dividend-company criteria while reviewing a revamped mid-term return policy, confirmation of that policy could change how the metric reads.
For reference, DS Investment & Securities said in a 21 May 2026 report that it maintained a Buy rating and a target price of KRW 380,000; that is the broker's view, not ours.
Because profit is simultaneously exposed to spreads in power, trading and petrochemicals, comparing multiples against an annual earnings base and cash flow rather than a single quarter stays closer to the facts.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04
The 49% Ulsan GPS transfer brought in about KRW 1.2242tn. On Korea Ratings' analysis, parent-only net borrowings fell from KRW 2.3645tn at end-2025 to KRW 1.2437tn at end-June 2026, with parent-only cash of about KRW 1.8tn.
In the confirmed accounts, the debt-to-equity ratio also eased from 175.3% in 2024 to 155.4% in 2025. That points to greater balance-sheet headroom now that the heavy investment cycle has passed.
Ulsan GPS has 1.2GW of capacity and takes 0.9-1.0mn tonnes of LNG a year from KET. The company says LPG can substitute when LNG prices run above LPG, leaving operating options during fuel-price swings.
Part of the rise in the consolidated operating margin from 4.0% in 2024 to 5.8% in 2025 reflects the addition of generation. Depending on utilisation and maintenance timing, this unit's profit contribution still has room to improve.
After the merger, sourcing, production and sales decisions are to be unified and funding and treasury consolidated to cut financing costs. Because no new shares are issued, existing holders face no dilution.
The company said it is reviewing a revamp of the 2027-2029 mid-term shareholder-return policy and will announce it once finalised. Operating cash flow of KRW 672.6bn in 2025 is the base from which any return capacity would be discussed.
Direction reversed within a single quarter, from KRW 227.7bn operating profit in Q1 2026 to a KRW 43.9bn operating loss in Q2. In 2025 as well, operating profit fell from KRW 173.5bn in Q3 to KRW 35.8bn in Q4, alongside an owners' net loss of KRW 15.7bn.
Q2 2026 results came in far below the FnGuide consensus of KRW 148.9bn operating profit and KRW 116.7bn net profit. Low predictability of earnings remains a variable at every reporting season.
SK Advanced posted operating losses of KRW 129bn in 2022, KRW 82.5bn in 2023, KRW 116.1bn in 2024 and KRW 140bn in 2025. Korea Ratings estimates a simple-combined debt-to-equity ratio of 131.2% and borrowing dependence of 44% after the merger, up 13.9pp and 1.6pp respectively versus parent-only.
Because a long-loss-making subsidiary is being absorbed, whether integration translates into actual profitability gains is flagged as the crux. If propylene spreads deteriorate again, integration benefits could be offset.
Even after selling 49%, the retained 51% keeps consolidation intact, but close to half of the generation subsidiary's profit now accrues to non-controlling interests. In the confirmed accounts, non-controlling interests already rose from KRW 9.3bn at end-2024 to KRW 216.5bn at end-2025.
Ulsan GPS was reported to have posted 2025 revenue of KRW 769.1bn and net profit of KRW 101.2bn. Even if generation profit grows, the portion attributable to owners will be lower than in the past.
LPG margins hinge on international propane and butane prices, the won and freight, and are sensitive to sales volumes. With sourcing shifting toward US shale, the procurement structure itself is changing. As when revenue slid from KRW 8.07tn in 2022 to KRW 6.99tn in 2023, price declines hit both top line and profit. Derivative-related gains and losses also amplify swings in net profit.
Power profitability is directly exposed to policy variables such as system marginal price, fuel-cost spreads and capacity payments. Utilisation changes tied to maintenance schedules also move quarterly profit.
Impairment assessment of the Ulsan GPS investment, industrial property rights and goodwill has recurred as a key audit matter, which was cited as a source of accounting-estimate uncertainty. Power demand may also evolve differently from expectations.
It was noted that if large investments in LNG infrastructure, hydrogen fuel cells and ESS are executed, the cash that offset the merger burden could shrink again.
Borrowings had already grown as the company expanded power, chemical and energy-infrastructure investment, with consolidated adjusted net debt rising from about KRW 1.6tn at end-2021 to around KRW 3.3tn at end-2025. The 2025 debt-to-equity ratio of 155.4% sits above the 135.0% of 2023. The pace of balance-sheet improvement will vary with the size and timing of investment.
Shareholder record date for the SK Advanced merger. Related filings, including the merger report and creditor-protection procedures, will show whether the schedule shifts.
Merger date. From then the 600,000-tonne PDH business enters SK Gas's parent-level portfolio, so parent-only borrowings, debt ratio and the actual PDH profit contribution should be checked.
Q3 2026 results and quarterly report. Key checks are whether the Q2 operating loss was one-off and whether generation utilisation and LPG trading margins recovered.
The company said it will share concrete strategic direction with the market from the second half and announce the renewed 2027-2029 mid-term shareholder-return policy once finalised. The size and form of returns (dividends versus buybacks) against investment allocation is what to verify.
FY2026 results and the year-end dividend resolution. These allow a check of combined annual profit across power, LPG and petrochemicals against the target of KRW 500bn average annual pre-tax profit through 2029.
SK Gas has been reshaping its profit mix by layering LNG and power generation onto its core LPG distribution and trading business.
In the confirmed accounts, operating profit troughed at KRW 287.2bn (4.0% margin) in 2024 and recovered to KRW 442.8bn (5.8%) in 2025, the debt-to-equity ratio eased from 175.3% to 155.4%, and 2025 operating cash flow was KRW 672.6bn.
Quarterly amplitude, however, remains large: after KRW 227.7bn operating profit and KRW 259.8bn owners' net profit in Q1 2026, Q2 brought an operating loss of KRW 43.9bn and an owners' net loss of KRW 36.5bn on revenue of KRW 2.31tn.
Structurally, the monetisation of 49% of Ulsan GPS for about KRW 1.2242tn while retaining 51% and the absorption of SK Advanced with a 4 November merger date are the two axes reshaping future earnings and finances.
The bullish case rests on the cash inflow and lower borrowings, normalising generation assets and value-chain integration; the bearish case on quarterly earnings volatility, the burden of absorbing a long-loss-making business, and a larger share of generation profit accruing to non-controlling interests.
With the mid-term shareholder-return revamp still under review and pending announcement, sequentially verifying earnings normalisation and then the policy details stays closest to the facts. This report is for information purposes and contains no buy or sell opinion or target price.
Report written 2026-09-05 · Data as of 2026-09-04
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