GS Caltex posted its largest loss since its foundation, posting more than 1 trillion won (some $0.8 billion) in operating losses in the first quarter of this year.
Analysts said that this is due to a combination of unfavorable factors such as the worldwide COVID-19 pandemic, a sharp drop in oil prices and a weak oil refining margin.
In its public notice on May 11, GS Caltex said that it posted 7.07 trillion won ($5.8 billion) in sales and 1.03 trillion won ($0.8 billion) in operating losses in the first quarter of this year. Its net loss is 1.01 trillion won($0.8 billion).
Its operating profit and net profit were both in the black in the same quarter of last year year-on-year and in the previous quarter, but it swung to the red this time. Its sales shrank 11.1 percent year-on-year and 18.7 percent from the previous quarter.
A sharp rise in inventory-related losses in the wake of the new coronavirus infections and a plunge in international oil prices is the main reason for the plunge in earnings, market watchers said.
Operating losses in the oil refining sector stood at 1.109 trillion won. Sales in the oil refining sector came to 5.509 trillion won, down 21.2 percent from the previous quarter.
In the petrochemical sector, operating profit fell 31.7 percent from the previous quarter to 20.2 billion won, while sales fell 11.2 percent to 1.244 trillion won.
In the lubricating oil sector, operating profit rose 77.2 percent to 67.2 billion won and sales rose 6.2 percent to 317.8 billion won due to a rise in product spreads.
However, the oil refining sector alone posted a loss of 1.1 trillion won ($0.9 billion), failing to offset gains in the petrochemical and lubricating sectors.
An official at GS Caltex said, "The performance has deteriorated significantly due to inventory-related losses caused by declining oil prices and falling product spreads," and added, "We are receiving positive reviews from credit rating agencies on financial management by reducing borrowing and maintaining stable investment."
Not only GS Caltex but also SK Innovation, Hyundai Oilbank and S-Oil, which announced their earnings earlier, posted their worst performance this year. The combined deficit of the four companies amounts to 4.37 trillion won ($3.6 billion).
Hyundai Oilbank and S-Oil both recorded losses of 563.2 billion won ($461.6 million) and 1.007 trillion won ($0.8 billion), respectively, far exceeding market estimates.
