GS Holdings reports nearly 57% profit increase in Q1, driven by inventory gains amid Iran war

GS Holdings reported a 56.68 percent on-year increase in first-quarter operating profit, largely due to temporary inventory gains from the Iran war.

The holding company, with oil refiner GS Caltex under its arm, reported an operating profit of 1.26 trillion won ($846 million) for the January-March period, up 56.68 percent from the same period last year, according to the disclosure on Wednesday. The quarterly revenue came in at 6.84 trillion won, up 9.88 percent on year. 

The company also posted a quarterly net profit of 826.7 billion won for this year’s January-March period. The figure surged by 183.6 percent compared to last year’s first quarter's 291.5 billion won.

The company attributed this year's surge to temporary inventory gains stemming from the war in the Middle East, which has driven up oil prices. 

“Excluding inventory gains, profit margin in the refinery sector compared to the previous quarter was reduced due to the gas price cap system," said a GS representative. "In the petrochemical and lubricant sectors, product prices failed to reflect the surge in oil prices, all of which deteriorated the profitability.”

The company warned of weaker results in the second quarter due to the ongoing war.

“In the second quarter, with volatility in oil prices likely to intensify due to the war, the oil refining industry’s ability to respond flexibly to such uncertainties will determine corporate performance,” the holding company said.

BY LEE SOO-JUNG [[email protected]]