SEOUL, Aug. 17 (Korea Bizwire) — Major Korean refiners posted strong earnings in the first half of the year thanks to solid petrochemical businesses, swinging from the pandemic-driven losses a year earlier, industry data showed Tuesday.
Four refiners — SK Innovation Co., GS Caltex Corp., S-Oil Corp. and Hyundai Oil Bank Corp. — logged a combined 4 trillion won (US$3.4 billion) of operating profits in the January-June period, shifting from 5.1 trillion won of deficits from a year earlier, their earnings reports showed.
Their robust earnings were driven by the non-refining businesses as the firms put more focus on petrochemical products and lubricant oil to offset a weak recovery in refining margins amid the prolonged COVID-19 pandemic.
Among them, S-Oil raked in the highest operating income of 1.2 trillion won in the first half as it increased output of petrochemical and lube oil products with higher margins.
SK Innovation generated 1 trillion won in operating profits in the six-month period, swinging from 2.2 trillion won of deficits from a year ago, thanks to robust earnings from petrochemical products and lube oil.
GS Caltex booked 1.1 trillion won of operating profits in the first half, and Hyundai Oil Bank raised a record high of 678.5 billion won of operating income over the period.
Cracking margins, the differences between the value of petroleum products and the value of crude oil, hovered below zero or remained in the $1 range last year as the pandemic hurt fuel sales and remained below $2 a barrel, far below the domestic refiners’ break-even points, according to the industry data.