S-Oil Q1 net drops 82.6 pct on weak PX margin

S-Oil Corp., South Korea's third-largest refiner, said Thursday its net profit tumbled 82.6 percent in the first quarter from a year ago due to lower cracking margin and a drop in paraxylene (PX) spread.

Net income came to 25.59 billion won ($24.7 million) in the January-March period from 147.45 billion won a year earlier, S-Oil said in a regulatory filing.

Sales fell 5.1 percent to 7.60 trillion won in the period, and operating profit nosedived 85.5 percent to 47.24 billion won.

The figures included earnings from S-Oil and its subsidiaries.

"The weak performance in the first quarter compared with a year ago was attributable to lower cracking margin and a fall in paraxylene spread," a company official said by phone, asking not to be named.

Paraxylene, derived from crude oil, is used as a raw material in producing polyester.

The benchmark Singapore cracking margin -- a measure of the profitability of oil refiners -- fell to an average of $2.70 per barrel against Dubai crude in the first quarter from $5 per barrel a year ago.

Paraxylene spread dropped to $325 per ton in the January-March period from $649 per ton in the first quarter of last year.

The company expected its second-quarter earnings to improve on the back of a rise in demand for transportation fuel and paraxylene. (Yonhap)