S-Oil turns to black with $5.7 million profit in Q4

A view of S-Oil's residue upgrading complex in Ulsan [S-OIL]

S-Oil swung to an operating profit of 7.6 billion won ($5.7 million) in the fourth quarter.

The Korean oil refiner said Friday it reported 7.6 billion won in operating profit during the October to December period from 160.4 billion won of operating loss during the same period last year.

Revenues stood at 9.8 trillion won, down 7 percent on year, beating the market consensus of 9.3 trillion won compiled by FnGuide.

Net profit came in at 209.8 billion won.

"Revenues rose thanks to increased sales," the oil refiner said in a statement. "Strong net profit came with the tax incentives from the 'Shaheen' petrochemical plant project [in Ulsan.]"

Specifically, S-Oil's oil refining business reported 265.7 billion won of operating loss in the fourth quarter while its petrochemical business reported 47 billion won of profit.

Its lubricants business generated 226.2 billion won of operating profit during the same period.

Annual operating profit stood at 1.4 trillion won last year, in line with analyst estimates. It's down 58.3 percent on year.

Revenues fell 15.8 percent to 35.7 trillion won, also in line with market expectations. Net profit plunged 52.6 percent to 998.2 billion won.

S-Oil expects a rosy 2024 with an expected recovery in demand and improved refining margins.

"Refining margins in Asia started to rebound in December which will boost the sales of heating oil," said Ahn Jeong-ho, head of its Investor Relations team, during a conference call on Friday. "With the extremely low temperature, demand for heating will increase up to 20 percent globally."

S-Oil shares rose 1.5 percent to close at 68,800 won Friday.

BY SARAH CHEA [chea.sarah@joongang.co.kr]