S-Oil takes top spot for first time on strong Q3

S-Oil, the third largest refiner in the country, beat out front-runners SK Innovation and GS Caltex in third-quarter earnings for the first time in the company’s history.

According to the industry yesterday, S-Oil recorded a 6.1 percent ratio of operating profit to sales in the past quarter, while SK reported 3.5 percent and GS 2.7 percent.

S-Oil said its refining business recorded 239.6 billion won ($219 million) in operating profit in the July-September period. The company’s combined operating profit marked 518.4 billion won, following SK’s lead. SK’s refining unit registered a 214.3 billion won operating profit. The company’s total operating profit marked 648.7 billion won, but the figure is 25 percent lower than a year earlier. GS swung from a 249.2 billion won deficit back to 323.8 billion won. The refining sector of the company brought in 71.5 billion won.

“GS is considering the poor performance of its refining business a serious matter and trying to find causes,” said an industrial official.

It is the first time that S-Oil in terms of sales outstripped the country’s No. 1 SK Innovation.

On an annual basis, S-Oil won a 24.8 percent growth of their operating profit, while the other two companies saw less than 20 percent growth of their profits. Financial analysts say such a poor performance from the two big players was unexpected.

“Because prices of oil and petrochemical products were higher in the third quarter than the first quarter when the companies particularly enjoyed high profits, they would have reaped a significant amount from the refining sector,” said a local financial analyst.

S-Oil said its marketing strategy was successful in the third quarter and expansion of the petrochemical plant helped raise profits.

The company’s new mascot, dubbed “Good Oil” in the latest TV commercial series, has gained popularity and made a noticeable contribution to the sales increase, it said. The mascot, a yellow drop of oil personified, was even made into a doll that is selling well.

“S-Oil boasted its best performance in the third quarter,” said Lee Da-sol, an analyst at Hanwha Securities. “Not only the refining unit, but also the petrochemical business saw an improved performance as the company’s second aromatics plant in Ulsan started making profits this year.”

By Song Su-hyun [ssh@joongang.co.kr]