By Kwanwoo Jun
S-Oil is scheduled to report first-quarter results on Monday. Here's what you need to know:
NET PROFIT FORECAST: The Saudi Aramco-controlled South Korean oil refiner is expected to post a net profit of 623.20 billion won, equivalent to $427.2 million, for the January-March period, according to a FactSet-compiled consensus forecast of six analysts.
That would reverse a net loss a year earlier and be more than double from the previous quarter.
REVENUE FORECAST: The FactSet consensus is for revenue to have increased 10% from a year earlier to 9.894 trillion won in the quarter, with operating profit likely reaching 976.39 billion won.
Shares in the company have gained more than 40% this year.
WHAT TO WATCH:
- CONSENSUS: Investors will look to see if S-Oil will post stronger earnings driven by higher oil prices, a surge in inventory value and wider oil refining margins. Analysts expect the company to have benefited from tighter supply of crude amid Middle East tensions.
- OUTLOOK: The company's future business outlook will be in focus, as geopolitical risks continue to rattle the industry despite a temporary truce in the Middle East and ongoing negotiations over a potential U.S.-Iran peace deal.
- MARGINS: Yuanta Securities Korea analysts recently said they expect higher oil prices to widen S-Oil's refining margin to $10.1 a barrel this year from $4.8 in 2025, though other analysts caution that Seoul's fuel-price caps aimed at cushioning the impact of the shock in energy markets could weigh on earnings.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com