S Korea’s S-Oil swings to net profit in Q3 on strong refining earnings
SINGAPORE (ICIS)–Major Korean refiner S-Oil posted a third-quarter net profit of Korean won (W) 545.4bn ($403m), a sharp reversal of the loss in the same period last year, on the back of strong refining margins and higher crude prices.
|in billion won (W)||Q3 2023||Q3 2022||Yr-on-yr % change||Jan-Sept 2023||Jan-Sept 2022||Yr-on-yr % change|
Refining operating profit for July-September 2023 surged to W666.2bn from W78.8bn in the previous corresponding period, the company said on Monday.
“Regional refining margins rebounded sharply [from the second quarter] due to strong demand in summer driving and air travel peak season amid tight supply situation,” S-Oil said.
In the second quarter, the refining segment incurred a loss of W292.1bn.
Oil prices rose in the third quarter as OPEC and its allies (OPEC+) extended their voluntary production cuts.
S-Oil’s petrochemical and lube businesses, however, both reported double-digit declines in earnings “primarily due to one-off and seasonal factors”, S-Oil said, citing a negative impact of W146.1bn from regular maintenance with a positive inventory-related impact of W234.3bn.
Petrochemical operating profit fell by 19% year on year to W45.4bn, while lube operating profit slumped by 61% to W147.2bn.
The paraxylene (PX) and benzene markets “maintained a decent level”, aided by “steady gasoline blending demand for feedstock aromatics and fresh demand from start-up of new large-scale downstream plant in the region”.
The polypropylene (PP) and propylene oxide (PO) markets, however, weakened due to start-ups and sluggish downstream demand linked to China’s manufacturing slowdown, S-Oil said.
Saudi Aramco, the world’s biggest crude exporter, through its subsidiary Aramco Overseas Co owns more than 63% of S-Oil.
($1 = W1,353.40)
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