S-Oil (010950) Q3 2024 earnings summary

Executive summary

• Q3 2024 saw an operating loss of -KRW 414.9 billion, mainly due to inventory-related losses from declining oil prices and FX rate impacts, with net income turning negative at -KRW 206.2 billion.

• Sales revenue dropped 7.6% sequentially to KRW 8.84 trillion, reflecting lower international product prices and a weaker won.

• Lube business income increased slightly quarter-on-quarter, while petrochemical income declined due to narrower spreads.

• The Shaheen Project, a major strategic initiative for energy transition and long-term value, reached 42% EPC progress by October end.

• Revenue for the first nine months of 2024 was ₩27,719,950 million, down from ₩35,726,694 million year-over-year, with operating income for the period at ₩199,805 million and a net loss of ₩61,322 million.

Financial highlights

• Q3 operating income: -KRW 414.9 billion; income before tax: -KRW 272.5 billion; net income: -KRW 206.2 billion.

• Cumulative operating income to Q3: KRW 199.8 billion; cumulative EBITDA Q1–Q3: KRW 454 billion.

• EBITDA for Q1-3 2024 was 1,789 billion Won.

• Cash balance at Q3 end: KRW 1,615 billion, up from Q2 due to reduced working capital needs; cash and cash equivalents at quarter-end were ₩1,604,272 million.

• Total borrowings (including bonds) increased to ₩7,149,902 million from ₩5,618,996 million at the end of 2023.

Outlook and guidance

• Asian refining margins expected to recover in Q4, supported by seasonal demand, supply restrictions, and maintenance.

• Demand for heating oil, jet fuel, and diesel projected to rise in winter, especially in Asia.

• The Shaheen Project is on track for mechanical completion in H1 2026 and commercial operation in H2, expected to double petrochemical production capacity.

• No additional large-scale capex projects are confirmed beyond current investments; company maintains conservative financial stance.

• CapEx execution for 2024 is on track to meet annual guidance despite a slow start.