S-Oil reported a turnaround to profitability in the second quarter of this year, driven by strong refining margins and favorable conditions in the lubricants market. However, the operating profit decreased from the previous quarter due to the absence of one-time inventory-related gains recorded earlier.
On August 3, S-Oil announced that its consolidated revenue for the second quarter reached 11.3435 trillion won, with an operating profit of 965 billion won, both showing a positive shift compared to the same period last year.
For the first half of the year, cumulative revenue totaled 20.2862 trillion won, with an operating profit of 2.1961 trillion won and a net profit of 1.2356 trillion won.
By business segment, the refining division reported revenue of 9.0293 trillion won and an operating profit of 532.4 billion won. Although refining margins surged due to tight supply conditions for refined products, the operating profit declined as the one-time inventory-related gains from the previous quarter were no longer present.
The petrochemical segment recorded revenue of 1.0125 trillion won but faced an operating loss of 44.8 billion won. The price of paraxylene (PX) fell slightly due to a sharp increase in raw material costs. Meanwhile, benzene saw improved margins due to low operating rates at Chinese facilities and the resumption of exports to the U.S.
Polypropylene (PP) margins decreased due to rising production costs from reduced propylene output caused by the blockade of the Strait of Hormuz, coupled with weakened demand from rising product prices. Propylene oxide (PO) margins improved due to supply constraints from lower regional operating rates.
The lubricants segment achieved revenue of 1.3017 trillion won and an operating profit of 477.4 billion won, marking the highest quarterly performance on record. The increase in margins was attributed to reduced supply of lubricants due to production disruptions in the Middle East and logistical constraints from the blockade of the Strait of Hormuz.
Additionally, S-Oil is preparing for the commercial operation of the Shahin project, expected to begin in early 2027. The company is currently verifying compliance with mechanical completion requirements and plans to conduct commissioning in the second half of this year, leading to commercial operations early next year.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.