It is expected that major Korean oil companies’ profitability for the second quarter of this year to be improved a lot from a year ago, based on a significant increase in refining margins.
SK Innovation is predicted to have turned into a profit of at least 540 billion won (US$481 million) from an operating loss of 50.2 billion won (US$44.7 million). The estimated amount is 69 percent more than its operating profit for the first quarter of this year, too. That of GS Caltex is estimated to have increased from 300 billion won (US$267 million) to 360 billion won (US$320 million) between the first and second quarters of this year, and S-Oil is expected to have reached 325 billion won (US$290 million) in operating profits to get out of losses. Hyundai Oil Bank, which recorded 38 billion won (US$33.9 million) in business profits in the second quarter of 2014, is expected to show some improvement as well.
Naphtha crackers are drawing a rosy picture, too. LG Chem’s business profits are estimated to have increased by at least 30 percent year-on-year, and the percentage amounts to more than 300 percent for Lotte Chemical. Hanwha Total’s are expected to exceed the 99.2 billion won (US$88.4 million) profit recorded in the first quarter of this year. The company posted a profit of 28.3 billion won (US$25.2 million) in the second quarter of 2014.
Their positive outlook can be attributed to an increase in the price of ethylene and a decline in the price of naphtha.