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Biz News Korea(Eng)
S-Oil delivers positive earnings surprise on improved oil refining margin
- Collected
- 2017.10.31
- Distributed
- 2017.11.01
- Source
- Go Direct
The refiner earned 553.2 billion won ($491.73 million) in the quarter on 5.212 trillion won in sales. Its pro forma operating profit skyrocketed 376.1 percent from the third quarter last year, while its sales grew 26 percent. Net profit climbed 132.1 percent to 398.7 billion won, with an operating margin of 10.6 percent.
The company said its oil refining margin greatly improved due to the tighter supply from disruption in hurricane-hit U.S. refiners amid recovery in global demand. The margin, a key measure of productivity of the refiner, represents the difference between what it costs to buy crude oil and the price commanded at the first wholesale level for refined products.
By sector, the company earned 336.4 billion won from oil refining with an operating margin of 8.2 percent. The company fully operated its oil refineries to leverage favorable business conditions. It also earned 90.5 billion won from petrochemical business (operating margin 12.9 percent) and 126.3 billion won from base oil for lubricants (operating margin 31.2 percent).
With regards to its fourth-quarter guidance, the company said a solid margin from oil refining will continue along with an increase in market demands and earnings will be maintained in petrochem thanks to fresh and resumed operations of high purity terephthalic acid plants and strong seasonal demands.
Shares of S-Oil ended Monday up 0.4 percent at 130,000 won ($115).
By Lee Jae-chul and Minu Kim
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