South Korea’s S-Oil Corp 010950.KS said on Thursday it projects regional refining margins will improve in the fourth quarter on seasonal demand, after posting a drop in profit for the third quarter.

The refiner, whose largest shareholder is Saudi Aramco 2222.SE, said in its earnings statement that regional refining margins are projected to improve, but with some volatility on winter seasonal demand.

Expected increases in Chinese exports are likely to be offset to some extent by the potential loss of Russian refining production, it added.

The company’s third-quarter operating profit fell 6.9% to 511.7 billion won ($361 million) over the same period a year ago, according to the statement.

In the July-September period, the refiner operated the crude distillation units at its 669,000 barrels per day (bpd) refinery in the southeastern city of Ulsan at 91.6% of capacity, down from 92.4% in the first half.

The refiner said no maintenance is planned for its crude distillation units or residue fluidized catalytic crackers in the fourth quarter.

S-Oil shares were up 0.97% as of 0021 GMT, versus a 1.23% rise in the wider market .KS11.
Source: Reuters (Reporting by Jihoon Lee; Editing by Muralikumar Anantharaman and Kenneth Maxwell)