Korea’s GS offers dim outlook after weak earnings; stocks down

GS Holdings Corp., the holding company of South Korea’s energy-to-retail conglomerate GS Group, on Wednesday provided a dismal business outlook for this year after logging sluggish earnings, sending its shares to their lowest level in more than a week.

GS Holdings said its operating profit fell 27.4% to 3.7 trillion won ($2.8 billion) in 2023 from the previous year on a consolidated basis as sales skidded 9.1% to 26 trillion won in a regulatory filing. The annual net profit tumbled 36.2% to 1.6 trillion won.

In the fourth quarter of last year, the company’s operating profit slid 22.5% to 695.3 billion won with sales down 7.7% to 6.6 trillion won. The quarterly net profits nearly halved to 126.3 billion won.

The earnings were hurt by sliding global oil prices and refining margins, a company official said. The holding company’s wholly owned subsidiary GS Energy Corp. has a 50% stake in GS Caltex Corp., a joint venture with US Chevron Corp. GS Caltex operates the second-largest refinery in South Korea.

“The market conditions are expected to remain tough as worries about a global economic slowdown are likely to dampen demand for refining and chemicals this year,” said the official. “The global economic recovery will be key for future earnings.”

After the sluggish earnings and dark business outlook, GS Holdings’ shares fell 2.4% to end at 49,800 won, their lowest close since Feb. 6,  far underperforming a 1.1% loss in Korea's main Kospi bourse. 

Write to Hyung-Kyu Kim at khk@hankyung.com
 
Jongwoo Cheon edited this article.