S-Oil, the South Korean oil refiner controlled by Saudi Aramco, is set to release its fourth-quarter results on Friday. Here are the key details:
Analysts predict a 13% decline in revenue compared to the previous year for the quarter ending in December.
The consensus forecast indicates that S-Oil’s net profit for the final quarter is expected to be 237.70 billion won ($178.1 million), a 3.8% increase from the previous year but a significant 56% decline from the previous quarter.
During the quarter, S-Oil’s stock experienced a 12% decrease, falling to KRW69,600. It is currently trading 0.7% lower at KRW67,800.
Key Factors to Watch
Investors will be closely observing the following factors:
Refining Margins and Oil Prices
The impact of narrower refining margins and lower oil prices on S-Oil’s earnings will be closely scrutinized. Additionally, there is a possibility of an inventory-related loss.
Future Refining Margins
Market analysts believe that S-Oil’s gross refining margin may have peaked in the third quarter of 2023. Nomura analysts predict a potential narrowing of the margin from $7.5 per barrel in 2023 to $5.9 per barrel in 2024.
Moderating Oil Demand
S-Oil’s strategy in response to the global oversupply and moderating pent-up oil demand will be a focal point of interest.