(LEAD) S-Oil Q1 net turns to black on stronger refining margins
2026.05.11 10:30
(LEAD) S-Oil Q1 net turns to black on stronger refining margins
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SEOUL, May 11 (Yonhap) -- S-Oil Corp., South Korea's third-largest refiner by sales, said Monday it turned to black in the first quarter on inventory-related gains, led by higher oil prices and improved refining margins amid the war in the Middle East.
Net profit totaled 721 billion won (US$491.1 million), shifting from a loss of 44.6 billion won a year earlier, the company said in a regulatory filing. Saudi Aramco holds a 63.4 percent stake in S-Oil.
Operating income for the January-March posted a net profit of 1.23 trillion won, compared with a loss of 21.5 billion won a year ago. Revenue edged down 0.5 percent to 8.94 trillion won over the cited period.
The operating profit was 7.7 percent higher than the average estimate, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
S-Oil said profitability in its refining segment improved thanks to inventory-related gains from higher crude oil prices and the lagged effect of crude pricing, although gains were partly offset by scheduled maintenance and domestic fuel price caps.
The lagging effect refers to the time gap between changes in crude oil prices and their impact on refiners' earnings.
Its petrochemical segment returned to profit on inventory-related gains, while earnings from the lubricant segment declined due to the delayed reflection of product prices.
Regional refining margins improved in the first quarter as reduced refinery operations and government-led export restrictions tightened supplies after the Strait of Hormuz, a key global oil shipping route, remained effectively closed following the United States' military campaign against Iran in late February.
For the second quarter, the company said refining margins are expected to remain solid, as supply disruptions are likely to outweigh softer demand caused by elevated fuel prices, though a potential decline in oil prices remains a downside risk.
S-Oil also said its 9.26 trillion-won petrochemical complex under the "Shaheen" project is on track to be completed by the end of June.
The new facility, located next to its existing refinery in Ulsan, about 360 kilometers southeast of Seoul, will produce major petrochemical products, including ethylene, propylene and butadiene.
ejkim@yna.co.kr
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