Operating Profit Surges on Soaring Oil Prices... S-Oil Posts 1.2311 Trillion Won in Q1

"Most Earnings Improvement Attributed to Inventory and Lagging Effects"

Shaheen Project Aims for Mechanical Completion by End of June

S-Oil reported an operating profit exceeding 1 trillion won in the first quarter of this year, driven by a surge in international oil prices.

On May 11, S-Oil announced that its first-quarter revenue reached 8.9427 trillion won, with an operating profit of 1.2311 trillion won. Compared to the previous quarter, revenue saw a slight increase, while operating profit rose significantly.

The company explained that most of the operating profit was due to inventory effects and lagging effects resulting from the rise in oil prices.

Operating profit in the refining division was tallied at 1.039 trillion won. The company attributed this to the rise in international oil prices and Asian refining margins, which were impacted by supply disruptions caused by the Middle East conflict.

The petrochemical division turned to profitability, recording an operating profit of 25.5 billion won due to gains related to inventory. The lubricants division saw its operating profit fall to 166.6 billion won compared to the previous quarter, due to the burden of higher raw material costs.

S-Oil stated that it maintained a stable crude oil procurement system despite supply instability stemming from the Middle East conflict.

The company explained that it secured supply stability through a long-term crude purchase agreement with its parent company Aramco, as well as a long-term shipping contract with Saudi shipping and logistics firm Bahri.

S-Oil currently imports crude oil equivalent to 10 cargoes per month under normal conditions, and the company noted that the volume, which had declined due to scheduled maintenance, is expected to return to normal levels from May to June.

The large-scale petrochemical Shaheen Project is also progressing as planned. As of the end of April, the project had reached a 96.9% completion rate, and the company is targeting mechanical completion by the end of June.

S-Oil emphasized, "We plan to complete preparations for commercial operation after trial runs by the end of this year."

Looking ahead to the second quarter, the company forecasts that the refining market will remain robust, as supply disruptions will persist despite concerns over slowing demand caused by high oil prices. However, S-Oil identified the potential for inventory losses and reduced profitability from lagging effects as variables in the event of a future decline in oil prices.

S-Oil Magok TS&D Center.

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