GS Reports Operating Profit of 798.1 Billion KRW in Q2, Up 12% Year-on-Year

Thanks to Improved Petrochemical Performance and Inventory Gains from Rising Oil Prices

GS Group's holding company GS announced on the 7th that it recorded consolidated sales of KRW 6.2037 trillion and operating profit of KRW 798.1 billion in the second quarter of this year. Compared to the same period last year, sales increased by 1% and operating profit by 12.1%. Net profit for the period rose by 16.6% to KRW 275.4 billion during the same period. Compared to the first quarter, sales, operating profit, and net profit decreased by 1.4%, 21.5%, and 42.1%, respectively.

GS Caltex, GS’s petrochemical affiliate, posted sales of KRW 12.6424 trillion and operating profit of KRW 208.1 billion in the second quarter. Sales increased by 17% year-on-year, and operating profit turned positive. This was due to strong performance in the petrochemical sector and inventory gains from rising oil prices. Operating profit in the petrochemical sector was KRW 109.1 billion, up 68% from the previous year.

GS explained, "Nevertheless, due to a decline in refining margins and a downward trend in the wholesale electricity price (SMP) of power generation subsidiaries, performance declined compared to the first quarter." The refining sector posted a loss of KRW 26.4 billion due to falling refining margins, resulting in a 50% decrease in operating profit compared to the previous quarter.

The lubricants sector recorded KRW 125.3 billion, down 17% year-on-year but up 7% compared to the previous quarter.

GS Group Headquarters, Gangnam-gu, Seoul [Photo by GS]

The refining sector’s operating rate in the second quarter was 93%, up 4 percentage points from the previous year. The petrochemical sector’s aromatics (PX) operating rate rose 23 percentage points year-on-year to 37%, while the olefin production facility (MFC·Mixed Feed Cracker) maintained the same rate as the previous year at 92%.

GS stated, "Due to the recently worsening geopolitical issues in the Middle East, uncertainties in oil prices and refining margins are expanding," adding, "Somewhat sluggish unemployment rates and other global economic indicators are increasing concerns about an economic recession, and these external factors are likely to ultimately determine performance in the second half of this year."

GS Consolidated Performance and Subsidiary Performance Trends [Image Source=GS]

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