GS reported a significant increase in operating profit for the third quarter of this year, driven by improved profitability in its oil business, with a 46% rise compared to the same period last year. Despite ongoing losses in the petrochemical sector, strong refining margins and robust performance in the lubricants business supported overall results.
On November 5, GS announced consolidated revenues of 7.27 trillion won and operating profit of 1.27 trillion won for the third quarter. This marks an 11.2% increase in revenue and a 46.4% increase in operating profit compared to the same period last year. Net profit for the same period rose by 66.9% to 680.4 billion won.
However, compared to the previous quarter, the results showed a decline. Revenue decreased by 1.9%, operating profit fell by 25.8%, and net profit dropped by 39.9%. Analysts attribute this decline to the impact of falling oil prices and exchange rates on inventory effects.
For the year-to-date, cumulative revenue reached 21.53 trillion won, with operating profit totaling 4.25 trillion won, reflecting increases of 15.1% and 96.8%, respectively, compared to the same period last year. Cumulative net profit stood at 2.64 trillion won, up 235.1%.
Among its major subsidiaries, GS Caltex showed notable improvement. The company reported third-quarter revenues of 17.76 trillion won and operating profit of 1.14 trillion won, representing increases of 61% in revenue and 208% in operating profit compared to the same period last year. However, operating profit decreased by 55% compared to the previous quarter.
In terms of business segments, the oil sector was the main driver of overall performance. Operating profit in the refining segment reached 696.8 billion won, a 183% increase year-on-year, benefiting from sustained high refining margins. In contrast, the petrochemical segment continued to face challenges, recording an operating loss of 1 billion won due to an inability to fully pass on rising naphtha prices to product prices.
The lubricants segment achieved record profits due to supply chain disruptions leading to supply-demand imbalances. Operating profit for the third quarter was 448.9 billion won, a 221% increase compared to the same period last year, and up 26% from the previous quarter, further supporting GS Caltex's overall performance.
The power generation segment also saw improved profitability, aided by seasonal demand and rising wholesale electricity prices (SMP). GS EPS reported third-quarter revenues of 360.7 billion won and operating profit of 56.3 billion won. GS E&R recorded revenues of 366.6 billion won and operating profit of 31.7 billion won, a 2% increase in operating profit year-on-year. The average SMP price for the third quarter was 134 won per kWh, up 15% from the same period last year.
GS Retail continued its positive trend, benefiting from growth in convenience stores and supermarkets. Third-quarter revenues reached 3.31 trillion won, with operating profit of 132.1 billion won, reflecting increases of 3% and 19%, respectively, compared to the same period last year. Notably, the supermarket segment's operating profit surged by 159% to 23.9 billion won year-on-year.
Looking ahead to the fourth quarter, external uncertainties are expected to be a significant variable affecting performance. Fluctuations in international oil prices due to the situation in the Middle East and the recent surge in crude oil transportation costs may pose challenges to the profitability of the oil business.
A GS official stated, "While the consolidated operating profit for the third quarter decreased compared to the previous quarter due to inventory effects from falling oil prices and exchange rates, it increased compared to the same period last year due to sustained high refining margins. We anticipate continued uncertainty in the fourth quarter due to oil price volatility stemming from the Middle East situation, making our ability to respond flexibly to market changes crucial for future performance."
* This article has been translated by AI.
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