The base oil and lubricant businesses of S-Oil and SK both reported significant improvements in their second quarter financial performance, compared to the same period of 2013.
S-Oil said its base oil business enjoyed a 27.7 percent increase in revenue, to 512.1 billion won (U.S. $497 million). Operating income reached 72.5 billion won, a 46.4 per cent jump from the second quarter of 2013.
S-Oil expressed a positive outlook for the second half of this year despite competitors opening plants that have brought additional supply to the market. A healthy spread will be supported by ongoing demand growth for high quality products and rising automobile sales in major lube markets, the company said in a written statement.
SKs base oil and lubricant operations also posted an 8.6 percent increase in sales, to 740.7 billion won. Operating profit was 79.4 billion won, a whopping 171.9 percent improvement year-to-year.
SK said its operating profit increased because of recovery in base oil demand. On the outlook for the second half of 2014, SK Lubricants Director Lee Bae Hyun said, Our joint venture base oil plant in Spain is to begin commercial operation around mid- September. We see not bad prospects in the second half.