SK Innovation said last Thursday the company has scrapped its plan for an initial public offering of its lubricant-making affiliate, SK Lubricants following improved earnings during the first half of 2015.

South Korea's largest oil refiner had pushed forward with an IPO of SK Lubricants to bring it out of financial troubles with new investment. The company suffered from an industry-wide slump last year, but it reported better-than-expected earnings in the first and second quarters, reducing internal pressure to attract new investment.

"We are stopping the IPO process of SK Lubricants as it might be difficult to evaluate its appropriate corporate value after the lube business suffered a temporary downturn," SK Innovation said in a regulatory filing. "We will focus on ways to improve SK Lubricants' profitability for now as the group posted better earnings in the first half of this year and reduced the debt level."

SK Innovation in May submitted an IPO application for SK Lubricants, one of several options the refiner considered along with a stake sale to improve its finances after posting a record high operating loss last year. Last month, SK announced that it has halted the negotiation process for SK Lubricants' stake sale with a private equity fund, MBK Partner.

"Considering the overall lube oil business environment, the company judged that improving the business model is more suitable than pushing for IPO at this point. We will focus on enhancing profitability," said Cha Jin-seok, chief financial officer of SK Innovation.

Last year, SK Innovation registered operating losses of 224.1 billion won (US$202.5 million), falling into the red for the first time in 37 years.

The refiner reduced inventory-related losses in the first quarter on the back of a rebound in oil prices, marking a 38 percent rise in its operating profit from a year earlier.

Meanwhile, SK Innovation said Thursday it swung to a profit in the second quarter on better refining margins and stock valuation gains from a recent rebound in oil prices.

Consolidated net income reached 587.53 billion won (US$507.73 million) in the April-June period, a turnaround from a 33.2 billion won net loss a year ago, the company said in a regulatory filing.

Sales tumbled 21 percent year-on-year to 12.99 trillion won, while operating profit jumped to 987.85 billion won from 33.3 billion won in operating loss a year earlier. These figures included earnings from SK Innovation and its subsidiaries, including SK Energy, SK Global Chemical and SK Lubricants.