[Alpha Biz=(Chicago) Reporter Paul Lee] S-OIL posted an operating profit of 1.4186 trillion won, down 58.3% from last year, due to reduced profitability in the oil refining sector.

S-OIL announced on the 2nd that its annual sales and operating profit were tentatively tallied at 35.7272 trillion won and 1.4186 trillion won last year. Sales and operating profit fell 15.8% and 58.3% year-on-year. Sales and operating profit in the fourth quarter of last year were 9.9304 trillion won and 7.6 billion won, respectively. Sales rose 9.2 percent from a year ago, but operating profit fell 99.1 percent.

S-OIL explained that its annual sales decreased due to a drop in product sales unit prices due to falling international oil prices.

According to the oil refining industry, the average compound refining margin in Singapore fell from $8.2 per barrel in the first quarter of last year to $4.1 in the second quarter. It rose to $9.5 in the third quarter, but fell to $5.4 in the fourth quarter.

By business unit, the oil refining sector recorded sales of 28.2571 trillion won and operating profit of 399.1 billion won last year. Sales fell 16.9% year-on-year and operating profit fell 83.0%. The petrochemical sector posted sales of 4.3848 trillion won and operating profit of 203.7 billion won last year. Sales fell 12.7% year-on-year, but operating profit turned into a surplus. The lube base oil sector recorded sales of 3.854 trillion won and operating profit of 815.7 billion won last year. Sales and operating profit fell 9.7% and 26.6%, respectively.

S-OIL predicts that Asian refining margins will remain higher than the average year due to low global inventory levels and stable demand growth in the oil refining sector this year.

 

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