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(LEAD) S-Oil shifts to loss in Q1 on inventory losses

All News 17:32 April 27, 2020

(ATTN: UPDATES with company's comments, stock prices; ADDS photo)

SEOUL, April 27 (Yonhap) -- S-Oil Corp., the No. 3 oil refiner in South Korea, said Monday that it swung to a net loss in the first quarter from a year earlier due to inventory losses and falling refining margins.

For the January-March period, S-Oil posted a net loss of 880.6 billion won (US$718 million), shifting from a net profit of 113.6 billion won a year earlier, the company said in a regulatory filing.

S-Oil said the net loss is blamed on inventory losses caused by low crude oil prices, and falling refining margins stemming from the coronavirus pandemic.

The S-Oil headquarters building in Mapo, western Seoul (Yonhap)

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.

S-Oil also shifted to an operating loss of 1 trillion won from an operating profit of 270.3 billion won a year earlier.

Sales fell 4.2 percent on-year to 5.19 trillion in the first quarter.

S-Oil said it expects refining margins to gradually recover in the second quarter on the back of the resumption of economic activities and regular maintenance work by refiners.

Shares in S-Oil rose 1.71 percent to 71,500 won on Monday, roughly in line with the broader KOSPI's 1.79 percent gain.

entropy@yna.co.kr
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