Korea National Oil Corporation Posts 313 Billion KRW Net Profit Last Year... First Surplus in 12 Years

Korea National Oil Corporation achieved a net profit of 313 billion KRW last year, marking its first return to profitability in 12 years since 2010.

The corporation announced on the 2nd that its consolidated results for last year recorded sales of 3.6403 trillion KRW and an operating profit of 1.7778 trillion KRW.

Sales increased by 78% (1.5913 trillion KRW) compared to the previous year, and operating profit rose by 368% (1.398 trillion KRW) during the same period, setting a record high.

Despite several challenges, including the windfall tax imposed on the UK Dana Company due to rising oil prices (an additional 25 percentage points on top of the existing 40% corporate tax rate in 2022), the corporation stated that by operating the ‘Management Performance Maximization TF,’ it proactively responded to risks and opportunities and devised optimal asset management plans, thereby enhancing financial soundness.

Korea National Oil Corporation.

The corporation’s TF has been intensively managing and implementing response measures throughout the year regarding production volume and costs, which affect financial performance.

In fact, the Tolmount gas field of the corporation’s UK subsidiary, Dana Company, began full-scale production in April last year, securing a stable annual production volume of 4.56 million barrels.

Furthermore, early production success at the UAE Haliba oil field and nearby linked development fields increased annual production by 520,000 barrels, contributing to the corporation’s sales growth through increased sales volume.

Additionally, cost management was strengthened by reducing non-fixed expenses by business segment, lowering the cost of sales for development projects, and cutting selling and administrative expenses by 5% compared to the previous year, making company-wide efforts to achieve net profit.

Over the past two years, the corporation has improved business performance, enhanced cash flow by selling non-core assets and providing credit support from headquarters to overseas subsidiaries, and recovered investment funds, reducing borrowings by 1.389 trillion KRW.

Through this, the corporation created an opportunity to overcome conditions where net profit could not be achieved due to interest expenses despite improvements in operating profit and other performance indicators.

Kim Dong-seop, President of Korea National Oil Corporation, said, “Despite long-standing difficulties, the company has continuously shared and communicated the management situation with its members, and all employees have united their capabilities with a ‘One-Team Spirit’ to carry out innovative management improvement activities and intensive self-help efforts.”

He added, “As a result, we achieved a turnaround to net profit for the first time in 12 years, which is expected to be a positive signal for strengthening the corporation’s financial soundness. Going forward, the efforts of all employees to restore public trust must continue.”

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