[THE INVESTOR] S-Oil will suffer from a decline in gross refinery margin next year, said KB Investment and Securities on Dec. 28 lowering the target price by 10 percent to 108,000 won (US$96.52) while maintaining a “buy” recommendation.
Its revenue in the fourth quarter will rise 15.9 percent on-year to 6.74 trillion won but it will turn to red with 12.6 billion won operating loss, said analyst Baek Yeong-jin.
Slow fourth-quarter earnings will dent the quarterly dividend to 3,000 won per share. The oil company has maintained approximately 50 percent dividend rate. It has cut down on investment but shrinking operating profit will undermine dividends, said the analyst.
By Hwang You-mee (email@example.com)