[Click eStock] "Korea Gas Corporation, Benefiting from Oil Price Rise... Operating Profit Expected to Recover"

[Asia Economy Reporter Park Jihwan] KB Securities evaluated that this year will be a period of operating profit recovery for Korea Gas Corporation, benefiting from the rise in oil prices.

Jung Hyejung, a researcher at KB Securities, explained, "Korea Gas Corporation's provisional operating profit for the fourth quarter of last year was 260.3 billion KRW, a 38.1% decrease compared to the previous year," adding, "During the same period, sales amounted to 5.4 trillion KRW, down 21.8%." Although LNG sales volume increased by 4.8%, the decline in selling price due to falling oil prices was identified as the main cause.

It was also explained that the actual annual LNG sales volume last year was 32.36 million tons, which was 3.7% less than the target sales volume of 33.61 million tons applied when calculating supply costs, negatively affecting operating profit. Additionally, despite increased production at the Australian GLNG field, the decline in selling price due to falling LNG prices contributed to the deterioration of operating profit.

However, this year, operating profit recovery is expected due to the benefits of rising oil prices. The average Dubai crude oil price in February was $59.8 per barrel, up 9.2% compared to the same period last year, entering an upward trend.

Researcher Jung stated, "both Korea Gas Corporation's operating profit and stock price are linked to the direction of oil prices, and the recent upward trend in international oil prices is positive," adding, "the rise in international oil prices is expected to have a short-term impact on improving the performance of overseas subsidiaries." It is anticipated that the recovery of LNG selling prices will restore profitability at the Australian GLNG field. The Australian Prelude field is also expected to escape operating losses as production resumes.

Researcher Jung emphasized, "a roadmap related to the hydrogen business is scheduled to be announced in March, and if specific hydrogen economy investment plans are presented, it could contribute to the corporate value of Korea Gas Corporation."

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