S-Oil Records All-Time High Operating Profit of 2.3064 Trillion Won Last Year

Refining 1 Trillion, Petrochemicals 300 Billion, Lubricant Base Oil 1 Trillion Operating Profit Each

"Expansion of Petroleum Product Demand and Increase in Refining Margins... Good Performance Expected This Year as Well"

Hussein Al Qatani, CEO of S-OIL. (Photo by S-OIL)

[Asia Economy Reporter Moon Chaeseok] S-OIL achieved its highest operating profit since its establishment last year.

S-OIL announced on the 27th that its annual operating profit last year reached 2.3064 trillion KRW, turning to a surplus compared to the previous year. During the same period, sales amounted to 27.4639 trillion KRW, an increase of 63.2% compared to the previous year. Net profit also set a record high since the company's founding at 1.5001 trillion KRW.

The company explained that sales increased significantly due to the rise in product selling prices following the increase in oil prices and the recovery in demand for petroleum products. Improvements in refining margins due to the recovery in oil demand and inventory valuation gains from rising oil prices pushed up operating profit. Maintaining the operation rate of core facilities at the highest level also impacted the performance.

By business segment, refining recorded an operating profit of 1.0277 trillion KRW, petrochemicals 277 billion KRW, and lubricants 1.017 trillion KRW. The recovery in demand for petroleum products, which had been depressed due to the COVID-19 pandemic, led to an increase in refining margins, and demand for high-quality lubricants continued, influencing the results. The company stated that profits were maintained at levels higher than before the pandemic.

The refining segment's performance was influenced by a significant rise in Asian refining margins as petroleum product demand continued to recover following the easing of COVID-19 restrictions. In the petrochemical segment, propylene oxide (PO) margins declined due to the operation of new PO plants in China and a slowdown in downstream demand caused by the widespread outbreak of COVID-19 variants. Conversely, polypropylene (PP) margins increased as demand for medical and packaging materials rose, and coal and propane prices surged, leading to lower PP plant operating rates in China. Lubricants, which posted record-high performance in the second quarter of last year, have maintained levels higher than those before COVID-19.

The company also reported that net profit set a record high. The net profit will be used for dividends to shareholders, strengthening financial soundness, and funding the second phase petrochemical project, the 'Shahin Project,' which is being prepared for the company's sustainable growth.

Meanwhile, narrowing down to the fourth quarter of last year, sales reached 8.2911 trillion KRW, and operating profit was 556.7 billion KRW, marking five consecutive quarters of operating profit since the fourth quarter of 2020. Sales increased by 16.5% compared to the previous quarter due to higher selling prices following the rise in oil prices and increased product sales volume. Operating profit rose by 1.3% quarter-on-quarter as refining margins surged significantly due to continued demand recovery.

S-OIL expects to achieve strong performance again this year. Although petroleum product inventories are at their lowest levels in recent years, demand is increasing, making it highly likely that refining margins will rise. Demand for petrochemical products and lubricants is also expected to remain at high levels continuously.

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