Due to Falling Oil Prices and Exchange Rates... S-Oil Reports 414.9 Billion KRW Operating Loss in Q3

Refining Sector 573.7 Billion KRW Loss
"Expecting Rebound in Q4, the Seasonal Peak"

S-OIL posted a loss in the third quarter due to a decline in refining margins caused by weak oil prices.

S-OIL announced on the 4th that it recorded sales of 8.8406 trillion KRW and an operating loss of 414.9 billion KRW in the third quarter. Compared to the same period last year, sales decreased by 1.77%, and operating profit turned into a loss. S-OIL explained, "The quarterly performance recorded an operating loss as the refining sector's deficit expanded due to one-time factors such as inventory effects from falling oil prices and a decline in exchange rates."

S-Oil headquarters building in Mapo-gu, Seoul. Provided by S-Oil

The refining sector posted sales of 6.8944 trillion KRW and a loss of 573.7 billion KRW due to worsening refining margins. The decline in Dubai crude oil prices, driven by concerns over a global economic slowdown, had a significant impact. The company stated that downside risks are limited due to ongoing geopolitical instability. In the fourth quarter, it is expected that Asian refining margins will gradually recover due to increased demand for jet fuel and winter heating oil, as well as refinery utilization adjustments by refiners.

The petrochemical sector recorded sales of 1.2016 trillion KRW and an operating profit of 5 billion KRW. PX and benzene were affected by a decrease in demand for aromatic feedstock blending into gasoline and an increase in supply following the completion of scheduled maintenance of production facilities in the Asia region. PP showed weakness due to sluggish downstream demand, but the PO market maintained its conditions due to maintenance and utilization adjustments of facilities in China.

The lubricants sector posted sales and operating profit of 744.6 billion KRW and 153.8 billion KRW, respectively. Despite seasonal demand slowdown in the off-season, the lubricants base oil fundamentals remained tight, maintaining market conditions, and the lubricants base oil spread rebounded due to a decline in raw material prices.