SK Innovation Co., South Korea's top oil refiner, said Thursday its third-quarter earnings shot up 87 percent from a year earlier due to higher oil prices and improved cracking margins.

Net profit stood at 696 billion won ($625 million) on a consolidated basis in the July-September months, compared with profit of 372 billion won a year earlier, the company said in a regulatory filing.

Operating income more than doubled from a year earlier to reach 964 billion won in the third quarter, with sales rising 17.5 percent to 11.76 trillion won over the cited period.

The refiner said higher oil prices led to a drop in inventory losses and to a growth in its petrochemical business.

Its refining business logged an operating income of 526 billion won in the third quarter, with its chemical business racking up an operating income of 326 billion won.

SK Innovation's lubricant business posted an operating income of 144 billion won during the July-September period.

In the first nine months of the year, SK Innovation racked up operating income of 2.39 trillion won on sales of 33.7 trillion won, figures that mark rises of 14.5 percent and 0.4 percent, respectively, from a year earlier.

SK Innovation forecast a rosy picture during the remainder of the year on the back of improving refining margins and stable oil prices.

The refiner said cracking margins will remain firm into next year due to tight supply amid strong demand.

"The refining margin is entering a correction stage after surging sharply," said the company. Next year, global oil refining facilities will amount to 740,000 barrels a day, while demand is estimated at 1.4 million barrels.

Its lubricant oil business will deliver a decent performance during the fourth quarter as well.

SK Innovation said it is planning to spend 10 trillion won by 2020 which translates into an investment of between 2.5 trillion won and 3 trillion won every year, according to a company official.

SK Innovation posted a record operating income of 3.23 trillion won last year following 2 trillion won operating income in 2015. (Yonhap)