An Unbeatable Record

S-Oil sees revenue rise 35 pct in H1 due to increases in sales of petrochemicals and exports


S-Oil Refinery Co. announced recently that its H1 sales were up 35 percent compared to the same period last year at 7.507 trillion won, operating profit up 29 percent and net profit up 39 percent amounting to 505.4 billion won and 426.2 billion won, respectively.
The oil refiner said demand for light oil has been rising on the international market with reduced profit margin for oil refining, while the margin for cracking business rose. S-Oil with the world-standard Bunker-C oil cracking center among its many high value-added facilities has taken advantage of the international oil market trends and was able to generate 505.4 billion won in operating profit, an outstanding record.
The company said large production of high value-added petrochemical products and securing stable marketing channel for those products like paraxylene, and propylene and finding new markets for high-grade lube oil to increase its sales helped the company boost operating profit.
With domestic oil demand growing smaller, S-Oil, with high value-added production facilities, relied on a marketing strategy to make best of its position in the oil industry to increase exports of its products. The move paid off in increased sales of its products and a larger operating profit.
A notable factor is S-Oil was able to continue to have a good performance record in the Q2, a traditionally off period for oil consumption in the country, boosting its sales in the period to 3.599,7 trillion on, operating profit 284.2 billion won and net profit 231.4 billion won, up 4, 28, and 19 percent from the previous quarter.
Company officials said the difference between prices of light and heavy oil have been widening in the international oil market, although the profit margin the oil refining has been narrowing. They said the gap between high sulfur products and low sulfur products have also been growing, meaning the growth of the cracking business margin. If the situation continues during the remainder of the year, S-Oil expects to have a better record in the H2 than in the H1.
S-Oil marked its 30th anniversary June 28 with ceremonies held at its refinery complex in Ulsan and its Seoul head office. Dr. Samir A. Tubayyeb, CEO of S-Oil, announced values shared among all S-Oil officers and employees for their company's leap into a world-class oil refiner. He also pledged the successful completion of the No.2 BCC project, which would lay the groundwork for the refiner's future growth.
Saying that a vision of "the most competitive, specialized oil refiner in the Asia-Pacific region"has made what S-Oil is today, CEO Tubayyeb promised to continue to pursue the vision. To do so, he added, S-Oil is seeking to construct a second bunker-C cracking center, a platform for S-Oil's future growth, by 2010.
The CEO said about his company's future stature ambitiously, "In 2010, when the No.2 BCC Project is completed, we will have a refining capacity of over 1 million bpd, retain our No. 1 ranking position as a global market leader with the largest exports of petroleum products among Korean oil refiners. Furthermore, we will emerge as a world-class oil refiner with 20 trillion won in sales and 2 trillion won in income." Even at the present time, S-Oil is evaluated as the most competitive oil refiner in Korea, thanks to its highest upgrading facility ratio and largest export volume among domestic refiners. In 2010, when its ongoing No.2 BCC project is completed, the CEO said confidently.
At the ceremony, S-Oil officers and employees resolved to pursue a clear set of values dubbed, "5S Spirit"to help their company achieve the above goals for 2010. The "5S Spirit"values are Superiority (top quality and service), Sincerity (Transparent management), Satisfaction (Customer satisfaction-oriented management), Sharing (Management based on "sharing", and Smart People (Cultivate the best and the brightest). Moreover, the "5S Spirit"values include S-Oil officers and employees will take their company one step closer to both customers and society by keeping values in mind during their management activities. nw

S-Oil CEO Dr. Samir A. Tubayyeb