S-Oil's Net Profit Declines in Q4 2023

S-Oil, a South Korean oil refiner controlled by Saudi Aramco, reported a decrease in net profit for the final quarter of 2023 due to narrower refining margins and lower oil prices.

Net Profit and Revenue

• In the quarter ended December, net profit was 209.84 billion won ($157.8 million), down 8.3% compared to the same quarter the previous year.

• This fell short of the FactSet-compiled consensus forecast of 237.70 billion won.

• Revenue in the quarter dropped by 7.2% year-over-year to 9.830 trillion won.

• Operating profit for the quarter was 7.57 billion won, a significant improvement compared to the operating loss reported a year ago.

Factors Contributing to Weak Quarterly Results

• S-Oil attributed the weak quarterly performance to lower oil prices and narrower refining margins.
• These challenges were compounded by seasonally weak demand and mild winter temperatures.

Full Year Performance in 2023

• In the full year of 2023, revenue decreased by 16% to 35.727 trillion won.
• Operating profit slumped by 58% to 1.419 trillion won.
• Net profit dropped by 53% to 998.17 billion won.

Outlook for 2024

• Despite uncertainties surrounding new refining facilities entering the global oil market, S-Oil anticipates steady oil demand in 2024.

For more information: Write to Kwanwoo Jun