Second quarter profit for South Korea’s refiners take a hit

South Korea’s second-largest oil refiner GS Caltex posted its second quarter net profit at KRW66.8 billion (US$59.8 million), a 79.2% plunge, from KRW321 billion (US$287.5 million) a year earlier. The refiner incurred an operating loss of KRW249.2 billion (US$223.2 million) for the quarter ended June, compared with an operating profit of KRW325.4 billion (US$291.4 million) a year earlier. Revenue from sales amounted to KRW11.77 trillion (US$10.5 billion), down by 2.4% from KRW12.06 trillion (US$10.7 billion) in the year-ago period. Second-quarter net profit was down 74.6%. The company attributed the poor performance to weak refining margins caused by low prices of refined and petrochemical products. GS Caltex, which controls 27% of South Korea’s oil market, is a 50-50 joint venture between South Korea’s GS Holdings and Chevron Corp. of the U.S. GS Caltex’s bigger local rival, SK Innovation also suffered a net loss of KRW305.3 billion (US$272 million) in the second quarter, from a net profit of KRW 299.6 billion (US$267 million) a year earlier. It also reported an operating loss of KRW105.3 billion (US$94 million) in the second quarter, despite a 10% rise in revenue to KRW18.88 trillion (US$16.8 billion) due to weak refining margins. The No. 3 refiner, S-Oil, also registered a net loss of KRW161.9 billion (US$144 million) in the second quarter, compared to a net profit of KRW238 billion (US$21 million) a year earlier. S-Oil recorded an operating loss of KRW161.2 billion (US$144 million) in the second quarter, despite a 9.6% rise in revenue to KRW8.80 trillion (US$7.8 billion). (August 14, 2012)