South Korean base oil refiners S-Oil and SK Energy each reported strong growth in lubricants revenue for the quarter ending March 31, and declines in operating income in their respective lubricants divisions, compared to 2007s first quarter.
S-Oils lubricants division reported a 37 percent decline in operating income for the three months ending March 31, to 54 billion Korean won (U.S. $54.2 million), down from 85.7 billion won ($85.9 million) during the year-earlier period.
Revenue for S-Oils lubricants segment rose 33.9 percent to 344.1 billion won ($345.7 million) in the first quarter, up from 256.9 billion won ($258 million) during the year-earlier period.
Headquartered in Seoul, S-Oil has capacity to produce 24,500 barrels per day of lubricant base oils, including 15,000 b/d of API Group II and 9,000 b/d of Group III. Its Ultra-S Group III products are marketed in the United States by ConocoPhillips.
As a whole, S-Oil posted quarterly operating income of 319.7 billion won ($321.1 million), down 17.4 percent from 386.9 billion won ($388.6 million) in the year-earlier period. The company recorded revenue of 4.9 trillion won ($4.9 billion) for the first quarter, up 45.5 percent from 3.3 trillion won ($3.3 billion) in the year-earlier period.
SK Energys lubricants division reported a 64 percent decline in operating income for the three months ending March 31, to 24.3 billion Korean won ($24.3 million), down from 67.7 billion won ($67.8 million) during the year-earlier period. SK Energy attributed the operating profit decrease to product pricing time-lag following a sharp rise in oil prices; and to an increase in selling, general and administrative expenses, including marketing costs.
Revenue for SKs lubricants segment grew 28 percent to 317.9 billion won ($318.5 million) in the first quarter, up from 249 billion won ($249.5 million) during the year-earlier period.
Based in Seoul, SK Energy has capacity to price 21,000 b/d of lubricant base oils, including 5,000 b/d of Group II and 16,000 b/d of Group III.
As a whole, SK Energy recorded quarterly operating income of 399.1 billion won ($399.8 million), down 16 percent from 476.1 billion won ($477 million) in 2007s first quarter. The company recorded revenue of more than 9.4 trillion won ($9.4 billion) for the first quarter, up 56 percent from 6.1 trillion won ($6.1 billion) in the year-earlier period.
In its financial results, SK summarized its base oil and lubricant sales volumes for the quarter. For the quarter ending March 31, base oil sales reached more than 2.4 million barrels, up 46 percent from 1.7 million in the year-earlier period. Total lubricant sales volume reached 725,000 barrels, up 6 percent from the 682,000 barrel mark in 2007s first quarter.