S-Oil profits take a turn and get back in the black
Oil refiner S-Oil reported 410.7 billion won ($357 million) in net profit for the year's second quarter — a turnaround from the same period last year when it was in the red.
The recorded amount also beat the market consensus of 318.6 billion won compiled by FnGuide.
Quarterly revenue was 6.7 trillion won, up 94.4 percent on year, the company announced Tuesday. The company reported 571 billion won in operating profit, a turnaround from a 164.3-billion-won loss during the same period last year.
Analysts had expected the revenue would amount to 6 trillion won and operating profit would be 465 billion won.
S-Oil said it was able to maximize its profitability by operating its facilities in Ulsan which helped to produce gasoline and propylene. S-Oil completed a residue upgrading complex and olefin downstream complex in Ulsan in 2018, which are downstream facilities that can produce gasoline, propylene and other chemicals from the residue naturally produced during the oil-refining process.
Its operating profit in the first half of the year totaled at an all-time high of 1.2 trillion won, beating its record to date, which was 1.13 trillion won in 2016.
S-Oil saw on-year profit growth across all business segments: oil refining, petrochemicals and lubricants.
In the first half, S-Oil's oil-refining business alone reported 494.5 billion won in operating profit, from 1.55 trillion won in operating losses in the same period last year. This accounted for about 41.2 percent of the total operating profit in the first half.
But the big contributors to its profit were petrochemicals and lubricants, which are smaller than oil-refining by revenue size.
Its petrochemical business reported 232.3 billion won in operating profit in the second quarter, while lubricants generated 473.4 billion won. They each accounted for 19.4 percent and 39.4 percent of the operating profit in the first half.
The company anticipates a favorable market in the second half of the year.
“As economic activities, which have slowed down globally [due to the pandemic], have increased, and the demand for transport fuels is likely to grow, low refining margins will likely recover soon,” S-Oil said in a report Tuesday.
BY SARAH CHEA [firstname.lastname@example.org]