GS Holdings swings to profit on strong GS Caltex results

GS Holdings reported a return to profit in the first quarter as its investment in GS Caltex paid a hefty dividend.

GS Holdings reported a return to profit in the first quarter as its investment in GS Caltex paid a hefty dividend.

The company’s net profit reached 584.6 billion won ($525.2 million) in the first three months of the year, in a dramatic swing from a net loss of 173.2 billion won over a year earlier.

The result far exceeded market estimates of 198.1 billion won, which was compiled by market tracker FnGuide.

GS Holdings owns 50.7 percent of GS Caltex and uses equity accounting for the subsidiary.

“GS Caltex greatly benefited from rising oil prices and improved profit margin,” said a spokesperson at GS.

The energy company turned to profit in the quarter, recording 632.6 billion won in operating profit from an operating loss of 51.2 billion won in the previous quarter.

“The gains earned through investment into GS Caltex accounts for 70 percent of GS Holdings’ profit. So the turnaround is critical for the group,” the spokesperson said.

Affected by a glut in oil and on lower demand for oil in the wake of the pandemic’s start, GS Caltex registered a record an operating loss of 1.04 trillion won in the first quarter, last year.

Operating profit at GS Holdings surged 7,366 percent to 706.4 billion won, while sales rose 2.1 percent to 4.3 trillion won.

GS Holdings didn’t provide on-year comparisons for most of its businesses.

GS Retail’s operating profit rose 46.1 percent to 37.5 billion on quarter, while GS Energy’s operating profit hit 551.4 billion won, up 175.8 percent on quarter.

Operating profit at GS Power rose 156.5 percent on quarter to 101.5 billion won.

GS Home Shopping’s operating profit plunged by 18.2 percent to 37.7 billion won during the first quarter.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]