Hyundai Oilbank, Q1 Operating Profit 412.8 Billion KRW... Returns to Profitability

[Asia Economy Reporter Hwang Yoon-joo] Hyundai Oilbank announced on the 29th that its consolidated operating profit for the first quarter of this year reached 412.8 billion KRW, achieving a turnaround to profitability. Sales increased by 2.7% to 4.5365 trillion KRW.

By business segment, the refining business recorded sales of 4.2858 trillion KRW and an operating profit of 211.3 billion KRW, an increase of 322.2 billion KRW from a loss of 110.9 billion KRW in the previous quarter. The main reason for the improvement in refining business profits is the expectation of global economic recovery and the rise in oil prices due to the cold wave in the United States, along with a continued recovery in refining margins.

The petrochemical business posted sales of 827 billion KRW and an operating profit of 87.2 billion KRW, turning profitable from a loss of 10.6 billion KRW in the previous quarter. This was influenced by improved product margins due to operational disruptions caused by the earthquake in Japan and the cold wave in North America. Once the heavy oil petrochemical cracking facility (HPC), targeted for commercial operation in November, is completed, it will have an annual production capacity of 850,000 tons of polyethylene and 500,000 tons of polypropylene. The HPC business’s profit and loss will be reflected in consolidated results from the fourth quarter of this year, raising expectations for further significant performance improvements in Hyundai Oilbank’s petrochemical business.

The lubricating base oil business recorded sales of 307.7 billion KRW and an operating profit of 103 billion KRW, an increase of 79.2 billion KRW compared to 23.8 billion KRW in the previous quarter. Due to low operating rates at global refineries, supply decreased while demand recovered, leading to margin increases and achieving a high operating profit margin of 33.5%. Hyundai Oilbank is maximizing plant operating rates to respond to the lubricating base oil market, which is showing strength centered on high-grade base oils.

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