GS Caltex announced that its operation turned a corner in the first quarter of this year, with operating profit rising to 303 billion won, up 272.2 percent year-on-year compared to a loss of 452.3 billion won in the first quarter of last year. The company said this year’s success is due mainly to the drastic fall in crude oil prices.
The oil refinery’s great performance boosted GS Group’s Q1 performance results to 198 billion won, up 187.5 percent year-on-year on sales of 2.784 trillion won and net profit of 140.4 billion won, which are up 5.2 percent and 215.2 percent, respectively, year-on-year.
Officials of the group attributed the excellent results to the turnaround in the operation of GS Caltex in Q1, boosting the group’s overall figures.
GS Caltex officials said the peak seasonal demand period for light fuel oils has arrived, while the price of crude oil has been rising, signaling that the oil refiner’s performance would continue to improve in the Q2, also.
To break down the group’s operating profit by its affiliates, the oil refining sector posted 182.4 billion won, petrochemical 90.8 billion won, lube oil 28.4 billion won, and others 1.3 billion won. The oil refining sector recorded operating profit for the first time since the Q3 of 2013.
The group’s major affiliates including GS Homeshopping also posted profits with GS Retail registering 39.7 billion won, up 27 percent year-on-year, followed by GS Energy with 89.2 billion won recovering from the loss of 4.9 billion won in the Q1 of last year.
GS Homeshopping had its operating profit sliding from those in last year by 28 percent at 26.7 billion won. Analyst Hong Song-soo of NH Investment and Securities said the homeshopping company had to cope with rises in its marketing expenses in competition with online shopping firms in such areas as TV ads, and fees on broadcasting of its programs.
In 2014, GS construction posted 9.5 trillion won in revenue and a 51 billion won operating income, reversing an operating loss of 950 billion won in 2013. The builder plans to boost its revenue and operating income to 10.1 trillion won and 200 billion won in 2015, respectively. It also seeks to secure new orders totaling 12 trillion won.
In 2015, GS Construction expects to sell more than 25,000 apartments, up 75 percent from 14,350 in 2014, as the local housing industry continues to boom amid low interest rates and other favorable market conditions.
"The company plans to earn 5.7 trillion won from its domestic operations this year. In addition, it expects to win orders worth 6.15 trillion won in foreign countries," a spokesman said. "We are having a smooth start overseas by securing an order in January to build a $2.6 billion gas plant in Venezuela. This was thanks to our advanced technical knowhow and vast experience in the construction of large-scale plants across the globe. We will earn more such deals in the coming months."
In 2014, the builder signed a dozen contracts to build oil refineries, natural gas process plants and power generation facilities, mainly in the Middle East and South America.
In a bid to avoid excessive competition and guarantee profits, GS has teamed up with other local construction companies to jointly win construction orders abroad.
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