The company benefits from strong economies of scale, good track record of high operating efficiency, and integration of the oil refining business with the petrochemical and lubricants business. Its diversified product mix helps generate stable operating cash flows. In 2018, SKI's adjusted EBITDA dropped 26% to Korean won (KRW) 3.1 trillion. Weak oil refining margins and a sharp decline in crude oil prices resulted in a substantial inventory loss of about KRW590 billion in the fourth quarter of 2018. That said, overall EBITDA will be KRW3.2 trillion-KRW3.6 trillion annually over the next two years, compared to the peak-of-the-cycle level of KRW4.2 trillion in 2016 and 2017. We believe SKI's financial policies have become more aggressive, and expect the company's capital
