GS, Caltex Boom Drives Q1 Operating Profit to 1.2 Trillion Won

GS Caltex, Refining Division Operating Profit Soars

[Asia Economy Reporter Moon Chaeseok] GS Corporation's first-quarter performance improved significantly, driven by GS Caltex's strong results. The power subsidiaries GS EPS, GS E&R, and GS Global also showed improvements in both scale and profitability.

GS announced on the 10th that its consolidated operating profit for the first quarter reached KRW 1.2427 trillion, a 75.9% increase compared to the same period last year. During the same period, sales rose 63.1% to KRW 6.9871 trillion, and net profit increased 28.0% to KRW 748.2 billion, according to preliminary estimates. A GS official stated, "GS Caltex achieved strong results due to inventory valuation gains from rising oil prices and improved refining margins driven by demand recovery. The power subsidiaries also posted solid results, leading to an overall improvement in GS's first-quarter performance."

GS Caltex recorded sales of KRW 11.2892 trillion and operating profit of KRW 1.0812 trillion, up 75.6% and 70.9% respectively from the same period last year. This was due to the rise in international oil prices caused by the Russia-Ukraine war and demand recovery following the COVID-19 pandemic, which also boosted refining margins, a key profitability indicator. The refining segment's operating profit surged 128.9% year-on-year to KRW 1.0609 trillion. The refining segment's operating rate rose 11 percentage points to 94% during the same period. The refining segment offset weaknesses in the petrochemical segment (which turned to an operating loss of KRW 50.7 billion) and the lubricants segment (operating profit decreased 43.2% to KRW 71.1 billion).

GS Energy recorded an operating profit of KRW 848.2 billion, a 53.8% increase year-on-year, including the results of GS Power, which has been a consolidated subsidiary since March last year through equity method investment in GS Caltex. Sales also rose 126.1% to KRW 1.9502 trillion during the same period. GS Retail's sales increased 23.7% year-on-year to KRW 2.5985 trillion, but operating profit fell 27.2% to KRW 27.3 billion. Although the home shopping division, merged in July last year, contributed to growth and the number of convenience stores and supermarkets increased, losses in digital and new businesses narrowed profit margins.

Power companies GS EPS and GS E&R posted operating profits of KRW 255.4 billion and KRW 82.8 billion, respectively, marking increases of 460.1% and 63.3% year-on-year. This was due to rising oil prices and increased electricity demand, which pushed up the System Marginal Price (SMP). GS Global recorded sales of KRW 1.2508 trillion and operating profit of KRW 23.8 billion, up 84.1% and 193.8% year-on-year, respectively. The trading markets for steel, coal, and other commodities performed well, driving growth in both scale and profits.

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