GS Holdings roars back into the black on oil prices

GS Holdings reported a record net profit of 1.6 trillion won ($1.3 billion) last year on the back of strong performance from its oil refining subsidiary, GS Caltex.

The company’s earnings announced Thursday beat a market consensus of 1.5 trillion won compiled by the FnGuide.

In 2020, GS Holdings reported a net loss of 187.8 billion won.

Sales in 2021 came to 15.4 trillion won, up 30.7 percent on-year, and operating profit was 920.6 billion won, up 180.3 percent.

“GS Holdings achieved an all-time high operating profit and net profit in 2021, overcoming some risks from Covid-19 in 2020,” the company said in a release Thursday.

“The biggest factor behind the improved earnings came from energy-related subsidiaries. For oil refining, refining margins were improved with oil demand recovering and inventory gains also improved with the increased price of crude oil.”

GS Caltex, an oil refining subsidiary, reported net profit of 1 trillion won last year, compared to a loss of 775.4 billion won the year
before.

Of the three main businesses at GS Caltex – oil refining, petrochemicals and lubricants – the oil refining division saw a major recovery.
Its operating profit went from negative 1.2 trillion won in 2020 to 1.4 trillion won last year with demand for oil surging globally.

GS Holdings’ retailing subsidiary, GS Retail, reported a net profit of 786.9 billion won, a 409.2 percent year-on-year increase.

The increase reflected extraordinary gains from merging with GS Home Shopping last year, the company said.

The subsidiary, which runs convenience stores and supermarkets, saw a dip in operating profit because of investments made last year to fortify its online and delivery services.

Operating profit slipped 17.5 percent year-on-year, coming in at 208.3 billion won last year.

Last year, GS Retail invested 65 billion won to buy a 1.3 percent stake in Kakao Mobility. It also invested 240 billion won in a 30 percent stake in Delivery Hero Korea, operator of Korea’s second-largest food delivery platform, Yogiyo.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]