S-Oil (010950) Q1 2026 earnings summary

Executive summary

• Q1 2026 saw robust performance across refining, lube, and petrochemical segments, with operating income surging to KRW 1.231 trillion, up 231% year-over-year, driven by inventory gains from rising crude prices and strong refining margins, despite scheduled maintenance and domestic fuel price caps.

• Revenue for Q1 2026 was KRW 8.942 trillion, a 1.7% increase quarter-on-quarter, with stable crude supply maintained through long-term contracts amid Middle East war disruptions.

• The Shaheen Project reached 96.9% mechanical completion by end of April, targeting full completion by June 2026 and commercial startup in early 2027.

• Majority shareholder Aramco Overseas Company B.V. ensured stable crude supply and strategic alignment.

Financial highlights

• Q1 2026 consolidated revenue: KRW 8.942 trillion; operating income: KRW 1.231 trillion; net income: KRW 721 billion.

• EBITDA for Q1 2026 was KRW 1.191 trillion.

• Gross margin improved to 16.2% from 1.9% year-over-year.

• Cash holdings at period end: KRW 1.58 trillion.

• Dividend payout: KRW 330 per common share, KRW 355 per preferred share.

Outlook and guidance

• Tight market conditions and healthy refining margins expected to persist into Q2 2026, with supply disruptions likely to outweigh demand softness.

• Potential for inventory-related losses if oil prices decline, increasing earnings volatility.

• Shaheen Project aims to double chemical production share to 25% upon completion in H1 2026.

• Gas Turbine Generator project to enhance energy efficiency, with completion expected by April 2027.

• Annual dividend payout will be at least 20% of net income, with interim dividends under consideration but subject to market volatility.