NICE Investors Service has revised the outlook for the unsecured bond credit ratings of SK Geocentric and Hanwha TotalEnergies from 'Stable' to 'Negative'. However, the long-term credit ratings for both companies remain at 'AA-'.
In a report released on June 17, NICE Investors Service cited the unfavorable supply-demand environment and ongoing operating losses as the main reasons for adjusting the rating outlooks for SK Geocentric and Hanwha TotalEnergies.
NICE Investors Service stated, "SK Geocentric and Hanwha TotalEnergies have a high proportion of sales from aromatic products compared to olefins," and explained, "Since the second half of 2024, demand for aromatic products used for gasoline blending has slowed due to falling oil prices, and the regional supply of PX (paraxylene) has increased, causing a sharp decline in PX spreads."
The agency also pointed out, "With the sharp drop in PX spreads, both companies have seen their quarterly losses gradually widen since the second half of 2024. In particular, in the first quarter of 2025, each company recorded operating losses of approximately 100 billion KRW."
NICE Investors Service further assessed, "Although oil prices and refining margins have shown some recovery in June, this is due to temporary shocks from geopolitical factors rather than a structural improvement in the supply-demand environment. Therefore, there remains significant uncertainty regarding the potential for a sustained recovery in profit generation."
Meanwhile, Korea Investors Service had previously downgraded the outlooks for SK Geocentric and Hanwha TotalEnergies from 'Stable' to 'Negative' as well.
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