S-Oil Corp., South Korea's No. 3 refiner, said Thursday its fourth-quarter net profit soared 172.1 percent from a year earlier as strong sales of petrochemical products offset the weak refining margin.

S-Oil posted a net profit of 129.7 billion won ($116 million) in the October-December period, compared with 47.7 billion won a year earlier, the company said in a regulatory filing.

Its operating profit jumped 880.5 percent on-year to 93.1 billion won, while sales tumbled 33.9 percent to 4.3 trillion won.

The company said a rise in prices of petrochemical products improved its earnings, despite sluggish cracking margins.

"The fourth-quarter operating profit turned to black led by demand recovery of petrochemical products and solid margins of olefin and lube base oil," the company said in a statement.

Saudi Aramco, the world's largest oil company, is currently the largest shareholder of S-Oil, with a 63.41 percent stake.

For the whole of 2020, S-Oil reported a net loss of 787.5 billion won, shifting from a net profit of 65.4 billion won a year earlier

It logged an operating loss of 1.1 trillion won for the year, compared with an operating profit of 420.1 billion won from the previous year.

Annual sales fell 31 percent on-year to 16.8 trillion won due to inventory-related losses and decreased cracking margins stemming from travel restrictions amid the COVID-19 pandemic.

Refining margins are linked to international oil prices. Higher crude prices mean greater margins, or the difference between the total value of petroleum products and the cost of crude and related services.

For 2021, the company expected a slow recovery in refining margins in the wake of the global rollout of COVID-19 vaccines, which will boost travel demand.

Shares in S-Oil shed 0.85 percent to 70,200 won on the Seoul bourse, outperforming the KOSPI's 1.71 percent fall. The earnings results were released shortly before the market closed. (Yonhap)