S-Oil (A010950) Q2 2026 earnings summary

Executive summary

• Q2 2026 operating income reached KRW 965 billion, supported by strong global refining margins and record-high lube base oil spreads, despite lower crude prices late in the quarter.

• Tight global supply and low inventories are sustaining firm market conditions, with disruptions and export restrictions impacting supply.

• The Shaheen Project is progressing toward commercial operation in early 2027, with mechanical completion, pre-commissioning, and commissioning activities underway.

Financial highlights

• Q2 sales revenue increased 26.8% quarter-over-quarter to KRW 11,343.5 billion, driven by higher crude prices.

• Q2 operating income was KRW 965 billion, down 21.6% from Q1 due to the absence of one-off crude price benefits, but rebounded from a loss in Q2 2025.

• Q2 net income was KRW 514.6 billion, down 28.6% from Q1 2026 but a significant turnaround from a loss in Q2 2025.

• EBITDA for H1 2026 was KRW 2.1 trillion.

• Inventory-related gains in Q2 were KRW 113.7 billion, mostly from the lube segment, down from KRW 643.4 billion in Q1.

Outlook and guidance

• Tight supply-demand conditions are expected to persist through at least the end of 2026 and into 2027, keeping refining margins firm.

• Lube base oil market strength, especially for Group III, is expected to continue due to ongoing supply disruptions.

• Market conditions for refining and lube businesses are expected to remain strong in the second half.

• CapEx for 2026 is KRW 2.1 trillion, with ordinary maintenance CapEx planned for 2027.

• Dividend payout ratio for 2026 will be at least 20%, with future guidelines to be developed.