S. Korean Refiners Set for Turnaround in Q3 on Stronger Margins
09.29.2023 By Tank Terminals - NEWS

September 29, 2023 [Yonhap News Agency]- Major South Korean refiners are expected to post a turnaround in their third quarter earnings, recovering from losses and dismal profits in the previous quarter, on the back of stronger margins amid rising oil prices, according to analysts Friday.


SK Innovation Co., the energy unit under SK Group, is forecast to log 667.5 billion won (US$498 million) in the operating profit for the July-September period, turning around from a loss of 107 billion won in the previous three months, according to the median estimate compiled by Yonhap Infomax, the financial news arm of Yonhap News Agency.

Revenue is estimated to reach 18.8 trillion won, up 0.8 percent from the previous quarter’s 18.7 trillion won.

Compared with a year earlier, the third-quarter consensus marks a 17 percent decline in sales and a 5.2 percent fall in operating income. The oil refinery industry boomed last year on rising oil prices.

S-Oil Corp. is projected to post 544 billion won in operating profit, recovering from 36 billion won in the previous quarter. Its revenue is estimated at 9.03 trillion won, up 15.51 percent from three months earlier.

GS Caltex Corp. is forecast to report 980 billion won in operating profit in the third quarter, turning to the black from a loss of 19 billion won in the second quarter. Its revenue is estimated at 12.9 trillion won, up 20.1 percent on-quarter.

A steady rise in the cracking margin, a key gauge of profitability for oil refiners, helped boost the bottom line.

The cracking margin jumped to $14.5 per barrel from $7.6 per barrel over the three-month period, according to a Samsung Securities report.

“Considering that the average Dubai crude rose to $92 (per barrel) in September from $74.6 in June, the inventory value is also expected to have improved significantly,” said Cho Hyun-ryul, a Samsung Securities analyst.

Refining margins are linked to international oil prices. Higher crude prices mean greater margins, or the difference between the total value of petroleum products and the cost of crude and related services.

“The cracking margin appears to be heading for a stable downtrend in the fourth quarter, but firm downstream demand from China and India is expected to continue, keeping the margin level above the average,” said Kim Do-hyun, an analyst at SK Securities Co.


Pro Trial: Access 12,600 Tank Terminal and Production Facilities

12,600 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

Investors flock to US Natural Gas ETF Despite Price Slump
12.04.2023 - NEWS
December 4, 2023 [Reuters]- Investors have been piling into an exchange-traded fund (ETF) designe... Read More
Dutch Fund Keeps Shell, BP in Portfolio as it Dumps 40 Other Oil Firms
12.04.2023 - NEWS
December 4, 2023 [Oil Price]- Dutch pension fund Pensioenfonds Metaal & Techniek (PMT) is div... Read More
Oman Announces Plans for Common Infrastructure for Green Hydrogen Liquefaction and Export
12.04.2023 - NEWS
December 4, 2023 [Zawya]- The Government of Oman, Hydrogen Oman (Hydrom), Port of Amsterdam, Zeni... Read More
US Crude Production in September Rose to Monthly Record - EIA
12.04.2023 - NEWS
December 4, 2023 [Reuters]- U.S. crude production in September rose to a new monthly record of 13... Read More