GS Caltex Posts Strong Results on Soaring Oil Prices... Q1 Operating Profit Reaches 1.6367 Trillion Won

Operating Profit Surges 13-Fold on Soaring Oil Prices and Improved Refining Margins

GS Caltex saw its operating profit surge more than 13-fold year-on-year in the first quarter of this year, driven by a sharp rise in oil prices due to the Middle East conflict and an improvement in refining margins.

On May 13, GS Caltex announced that, on a consolidated basis, it recorded sales of 13.0347 trillion won, operating profit of 1.6367 trillion won, and net profit of 985.3 billion won in the first quarter of this year. Compared to the same period last year, sales increased by 17% and operating profit grew by 1,310%.

The refining division posted sales of 10.3486 trillion won and operating profit of 1.5285 trillion won. Oil prices soared due to the blockade of the Strait of Hormuz, leading to inventory-related gains, while a tight supply of kerosene and diesel further boosted refining margins.

The petrochemical division generated sales of 2.1209 trillion won and operating profit of 35 billion won. Although the aromatics spread initially rose on expectations of improved supply and demand at the beginning of the year, it turned weaker as naphtha prices increased following the outbreak of the Middle East crisis.

The lubricants division recorded sales of 565.3 billion won and operating profit of 73.3 billion won. Profitability declined quarter-on-quarter due to a decrease in the base oil spread, which was impacted by the sharp rise in oil prices.

GS Caltex explained that the inventory valuation gains and time lag gains reflected in this performance are temporary accounting effects. The company also added that, if oil prices fall after the Middle East situation stabilizes, it could result in inventory-related losses.