S-Oil: quarterly revenue up 40.9%, but cash flow remains negative

28 августа S-Oil раскрыла результаты за второй квартал 2026 года. Выручка выросла на 40,9% год к году до 11 343 488 млн вон, EBITDA составила 1 177 693 млн вон с маржой 10,4%, чистая прибыль – 514 584 млн вон. При текущей цене акции выглядят скорее привлекательно: мультипликатор EV/EBITDA ниже среднего за три года, но операционный денежный поток остаётся отрицательным, что ограничивает потенциал.

Key takeaways

— Revenue in Q2 2026 grew 40.9% YoY to KRW 11,343,488 million

— EBITDA margin reached 10.4% versus negative a year ago, driven by higher operating profit

— Net profit was KRW 514,584 million, margin 4.5%

— Operating cash flow in Q2 2026 was negative at KRW -43,076 million

— Capital expenditure in Q2 2026 was KRW 617,066 million, exceeding operating cash flow

— Net debt rose to KRW 7,531,631 million, Net Debt/EBITDA LTM ratio at 1.69

— Trailing 12-month dividend yield is 0.68%, below the key rate

Attractiveness

Key figures, KRW bn

Revenue in Q2 2026 grew 40.9% YoY to KRW 11,343,488 million

In Q2 2026, S-Oil's revenue reached KRW 11,343,488 million, up 40.9% from the same quarter a year earlier. This is a sharp acceleration after nearly flat growth in Q1 2026 (-0.5% YoY).

The revenue growth likely reflects favorable pricing in refined products and petrochemicals, although the exact drivers are not disclosed in the provided data. Quarterly dynamics show a recovery after a weak 2025, when revenue declined by 1-16% on a quarterly basis.

EBITDA margin reached 10.4% versus negative a year ago, driven by higher operating profit

EBITDA in Q2 2026 was KRW 1,177,693 million, corresponding to a margin of 10.4%. A year earlier, EBITDA was negative: KRW -141,789 million, margin -1.8%.

Operating profit rose to KRW 965,015 million from KRW -343,971 million a year ago. The margin improvement is likely due to wider refining spreads and higher sales volumes, although specific factors are not specified in the data.

Net profit was KRW 514,584 million, margin 4.5%

Net profit in Q2 2026 reached KRW 514,584 million versus a loss of KRW 66,782 million a year earlier. Net margin was 4.5%.

Profit was supported by operating leverage and possibly the absence of one-off write-downs that occurred last year. However, operating cash flow remains negative, indicating a significant gap between profit and cash generation.

Operating cash flow in Q2 2026 was negative at KRW -43,076 million

Operating cash flow in Q2 2026 was KRW -43,076 million. This is the fourth consecutive quarter with negative or low operating flow: in Q1 2026 it was KRW -523,886 million, and in Q2 2025 it was KRW +401,651 million.

Negative operating flow despite high profit is likely due to working capital build-up – higher inventories and receivables amid revenue growth. This is a temporary factor but puts pressure on liquidity.

Capital expenditure in Q2 2026 was KRW 617,066 million, exceeding operating cash flow

Capital expenditure in Q2 2026 was KRW 617,066 million, significantly exceeding the negative operating cash flow. The deficit was covered by increasing debt.

Free cash flow thus remains deeply negative, limiting the ability to pay dividends and requiring further borrowing.

Net debt rose to KRW 7,531,631 million, Net Debt/EBITDA LTM ratio at 1.69

As of the end of Q2 2026, S-Oil's net debt stood at KRW 7,531,631 million, up KRW 729 billion from the previous reporting date and KRW 1,273 billion over the past 12 months.

The net debt / EBITDA ratio for the trailing twelve months is 1.69. This is a moderate level, but given the negative free cash flow, leverage will increase if operating cash flow does not recover.

Trailing 12-month dividend yield is 0.68%, below the key rate

Over the trailing twelve months, S-Oil paid dividends yielding 0.68% at the current price. This is significantly below the key rate, making the stock unattractive for income-oriented investors.

Payments were likely constrained by weak 2025 results and negative free cash flow. In the current year, with profit recovery, the company may increase dividends, but this will depend on payout policy and capital expenditure needs.

Valuation on the latest reported figures

Bottom line

In Q2 2026, S-Oil showed a strong recovery in profitability: revenue grew 40.9%, EBITDA margin reached 10.4%, net profit was KRW 514,584 million. However, operating cash flow remains negative, forcing the company to increase debt to finance capex. Dividend yield is low, and valuation (EV/EBITDA 7.39 versus 3-year average 11.44) looks attractive, but only if cash flow normalizes. Verdict – rather attractive: potential exists but will only materialize with sustained recovery in operating cash flow.