S-OIL Maintains Moody's International Credit Rating as 'Stable'

[Asia Economy Reporter Hwang Yoon-joo] S-OIL maintained its international credit rating despite the downturn in business conditions caused by the novel coronavirus infection.

On the 4th, international credit rating agency Moody’s reaffirmed S-OIL’s existing corporate credit rating of ‘Baa2’. The credit outlook was also maintained as ‘Stable’.

Moody’s explained, “The reaffirmation of S-OIL’s credit rating and the ‘Stable’ outlook reflect the expectation that although operating performance was weak this year, with capital expenditures and dividends expected to remain low over the next one to two years, performance recovery will improve S-OIL’s credit metrics in 2021?2022 to a level that supports its current standalone credit profile.”

S-OIL recently forecasted through its Q2 earnings announcement that demand will gradually recover in the second half of the year due to the easing of COVID-19 related restrictions, oil prices will stabilize, and performance will improve.

An S-OIL official stated, “We are focusing on stabilizing our financial structure despite the downturn caused by the COVID-19 pandemic by maintaining prudent financial policies such as facility upgrades through the first-phase petrochemical project RUC/ODC, business diversification into petrochemicals, dividends considering financial stability, and minimizing costs and investment expenditures.”

Meanwhile, as S-OIL plans to issue won-denominated public bonds at the end of August and maintains its existing credit rating and outlook from Moody’s, market investor sentiment is expected to act positively.

This content was produced with the assistance of AI translation services.