S-Oil Posts 21.5 Billion Won Operating Loss in Q1... "Improvement Expected From End of First Half"

Dividend Payout Ratio at 20%, "Continued Shareholder Returns"
Shaheen Project Progress Reaches 65.4%

S-Oil reported an operating loss in the first quarter, turning to a deficit due to sluggish demand amid concerns over an economic slowdown.

On April 28, S-Oil announced that its sales in the first quarter of this year reached 8.9905 trillion won, with an operating loss of 21.5 billion won. Sales decreased by 3.4% compared to the same period last year, and the company shifted to a deficit from an operating profit of 454.1 billion won in the first quarter of the previous year. During the same period, net loss amounted to approximately 44.6 billion won. The company explained, "Amid weak demand due to concerns over an economic slowdown, refining margins fell as regular maintenance at some regional refineries was postponed."

By business segment, the refining division recorded sales of 7.072 trillion won and an operating loss of 56.8 billion won. The petrochemical division posted sales of 1.128 trillion won and an operating loss of 74.5 billion won. The lubricants business achieved sales of 790.5 billion won and an operating profit of 109.7 billion won.

S-Oil predicted that the progress of tariff adjustment negotiations in the second quarter would have a significant impact on refining margins. A company official said, "There are both demand-decreasing factors such as global economic uncertainty and demand-increasing factors such as low oil prices." The official added, "While supply is expected to be limited due to concentrated regular maintenance by regional refiners, there will likely be stockpiling demand ahead of the summer gasoline peak season." The company further noted, "Although there is a possibility that demand forecasts may be revised downward due to global uncertainties such as U.S. tariff issues, demand is gradually recovering based on low oil prices. With the official selling price (OSP) expected to decline, we anticipate refining margin improvements from the end of the first half."

Regarding the petrochemical division, the company stated, "Uncertainty remains high as the market takes a wait-and-see approach to economic conditions such as the imposition of U.S. tariffs." However, it also forecast, "There is potential for market improvement based on additional economic stimulus measures in China and increased gasoline blending demand during the summer." For the lubricants division, the company projected, "Market conditions are expected to recover as seasonal demand increases and major suppliers conduct regular facility maintenance. In addition, as raw material prices fall due to declining oil prices and this is reflected in product prices with a time lag, spreads are expected to improve."

In addition, the company announced plans to enhance corporate value through shareholder returns with a dividend payout ratio of 20% (for 2025 and 2026) and growth strategies such as the completion of the Shaheen Project. As of mid-April, the Shaheen Project had reached a progress rate of 65.4%, with mechanical completion targeted for the first half of next year.