South Korea's S-Oil's eyes "rosy" Q2 after 5-year high Q1 profits

London, (Quantum Commodity Intelligence) - South Korean refiner S Oil said Tuesday that its refining margins are expected to improve over the next quarter as demand for refined products improves amid increasing vaccination rates.

The company, which is part-owned by Saudi Aramco, posted a KRW629 billion ($565 million) operating profit in the first quarter, the highest in almost five years.

Just over half of the profits came from S Oil's refining business, the company, which is South Korea's third-biggest refiner, said in a press release.

The petchem business booked KRW98.3 billion of operating profit, while the lubricant base oil business chalked up KRW188.9 billion.

"Refining margins are expected to improve gradually as demand for petroleum products recovers due to the limited impact from increasing supply as shutdowns of uncompetitive facilities increase, and demand recovery supported by increasing vaccination rate," the company said.

"The outlook of S-OIL's performance in the second quarter seems rosy considering the fact that its new upgrading facilities are now at the phase of stable operation and all units can be operated reliably without shutdowns as there are no major turnarounds planned this year," it said.