Good morning. This is Katie Kang, Treasurer of S-Oil. I'd like to extend my gratitude to our investors and analysts in S-Oil's Conference Call for Q2 2026 Earnings Result. For today's conference call, we have CFO JW Bang, IR Team Leader, Mr. HD Jeong, and team members. I will take you through the highlights of Q2 results. 2026 global refining margins remain strong as the impact of the Middle East conflict continued. Despite lower crude prices toward the end of Q2, as the blockade of the Strait of Hormuz was temporarily lifted, operating income reached KRW 965 billion, supported by strong global refining margins and record-high lube base oil spreads. In particular, the lube business contributed significantly to Q2 earnings, posting a record quarterly operating profit of KRW 477.4 billion. The market outlook. Due to the Middle East conflict, crude oil and product supply disruptions continued in the first half, leaving global inventories at significantly low levels. With tight supply-demand conditions expected to persist in the second half, we expect firm market conditions to continue. The progress of Shaheen Project. The Shaheen Project is progressing toward commercial operation in early 2027. The company is currently conducting field inspections, equipment performance checks, and document verification to confirm mechanical completion. Pre-commissioning and commissioning activities are also in progress across the process units. The company will make every effort to ensure a smooth start-up in the second half and achieve commercial operation in early 2027. Mr. HD Jeong will get into more details for Q2 performance and market outlook. Good morning. This is S-Oil IR Team Leader, HD Jeong. Before we begin, please note that Q2 2026 and therefore subject to change according to outside independent external auditors' audit results. For Q2 2026 financial results. In Q2, the company posted sales revenue of 26.8% QoQ, driven by higher crude prices. Operating income was KRW 965 billion, down QoQ as the one-off impact of higher crude prices recognized in Q1 largely subsided. If you look at each business segment, operating income from the refining segment declined 49% QoQ to KRW 532.4 billion. Although global refining margins remained strong, particularly for diesel and kerosene amid the Middle East conflict, operating income decreased QoQ due to the reverse base effect from the one-off crude price benefit recognized in the first quarter. Although margins improved slightly QoQ, the segment turned into a loss due to inventory-related impact. Operating income rose 187% QoQ to KRW 477.4 billion, driven by record-high product spreads amid tight supply-demand conditions. As mentioned earlier, this represents the highest quarterly operating profit on record. For reference, the company recorded KRW 113.7 billion in inventory-related gains in Q2, most of which were generated by the lube segment. This was significantly lower than KRW 643.4 billion recorded in the previous quarter. In financial and other gains and losses, the company recorded net interest loss of KRW 66.6 billion and net foreign exchange loss of KRW 155.6 billion due to foreign exchange increase. Q2 income before tax and net income come in at KRW 705.5 billion and KRW 514.6 billion respectively. Moving on to financial status, as of the end of Q2 2026, the company held KRW 1.5 trillion in cash, while net debt-to-equity ratio was 78.1%. Despite external market volatilities, the company continues to maintain a stable financial structure through competitive and timely financing at low interest rate to support smooth execution of Shaheen Project and proactive working capital management. EBITDA for the first half came in at KRW 2.1 trillion. I'll go through market environment and outlook by each segment. Turning to the refining segment on page seven. As mentioned earlier, Asian refining margins expanded sharply in Q2 driven by the Middle East conflict. Second quarter operating income from the refining segment on Q2 to KRW 532.4 billion as the substantial inventory related gains recognized in the first quarter did not recur in the second quarter. Turning to Dubai Crude prices in the second quarter, prices remained above $100 per barrel throughout April and May as the Middle East conflict continued and the Red Sea remained closed. Following the temporary easing of the blockade in June, crude prices declined rapidly, with Dubai Crude averaging $79.50 per barrel for the month. Crude prices have continued to fluctuate sharply in line with developments in the conflict, and they are expected to remain highly sensitive to geopolitical developments going forward. Asian refining margins expanded further in Q2 as tighter refined product supply relative to crude drove product spreads sharply higher. The market was supported by the start of the driving season, continued Ukrainian drone attacks on Russian refineries, and supply disruptions from the Middle East. The average kerosene and diesel spreads widened further QoQ to around $62 per barrel. Gasoline spreads also increased QoQ with the onset of the driving season, reaching $24 per barrel in Q2. The tight market environment is expected to persist in Q3 amid ongoing crude and product supply disruptions. Expected to increase demand for diesel using power generation due to heat waves. Continued Ukrainian drone attacks on Russian refineries and Russia's export restrictions on products such as jet fuel and diesel are expected to keep major product markets tight. Geopolitical developments are expected to influence the strength of product spreads in the second half of the year. A more detailed outlook will be provided in the Key Business Update section with supporting data. Next is petrochemical business segment. In Q2, petrochemical segment posted an operating loss of KRW 44.8 billion, although margins improved somewhat, supported by higher PO spreads. Inventory related gains turned into losses from the previous quarter. Let me now discuss the market environment in Q2. In April and May, PX spreads narrowed to around $200 per ton on average as feedstock naphtha prices surged following the Middle East conflict, while PX prices failed to keep pace with the increase in naphtha prices. In June, naphtha prices stabilized following the easing of the Strait of Hormuz blockade, allowing PX spreads to recover to the $350 per ton range. The average PX spreads for Q2 came in at $260 per ton. For benzene, lower operating rates at major facilities due to naphtha supply disruptions, together with the resumption of crude imports from Iran, helped improve the regional supply-demand balance. As a result, average benzene spreads for Q2 increased by $20 QoQ to $139 per ton. For olefin downstream products, the average PP spreads over propylene improved to $29 per ton in Q2. For PO, the market remains strong as lower operating rates caused by feedstock supply disruptions following the Middle East conflict, together with pre-buying demand from downstream customers concerned about supply shortages, supported the prices per ton in Q2. Let me discuss the outlook for the petrochemical segment in Q3. For aromatics, supply is expected to decline as planned maintenance shutdowns at Chinese facilities originally scheduled for Q2 have been postponed to Q3, resulting in lower operating rates. However, market conditions are likely to remain volatile, depending on the timing of plant restarts and the pace of downstream demand recovery. If geopolitical tensions persist, volatility in feedstock supply and prices, including naphtha and propylene, is also expected to continue. For olefin downstream products, PP is amid continued regional supply growth from new capacity additions. Meanwhile, for PO, spreads are expected to moderate as supply recovers from the previous quarter and seasonal demand weakens. Next is lube business segment. Operating income from the lube segment reached a record high KRW 477.4 billion across all grades due to supply disruptions in the Middle East, with particularly tight market conditions for Group III base oil. Direct product disruptions at Middle East facilities, together with logistics constraints Strait of Hormuz drove a sharp increase in LBO prices. As increased by approximately $90 per barrel QoQ to a record high $139.7 per barrel. Tight supply-demand conditions are expected to persist in Q3 as supply disruptions continue. A more detailed explanation will be provided in the Key Business Update section. Next is Key Business Update. First, let me walk you through the supply and demand outlook. The Middle East conflict continues to affect global crude oil and refined product- of Hormuz and the Red Sea have disrupted crude oil transportation, leaving global crude inventories at historically low levels. Product inventories have also remained at historically low levels due to the blockage refineries in the Middle East and Russia. With both crude oil and refined product inventories remaining at low levels, tight supply-demand conditions continue to persist. Despite U.S. refineries operating at exceptionally high utilization range during Q2, U.S. gasoline inventories have fallen to historical low levels due to reduced imports amid tight market conditions. In addition, as demand for diesel for power generation has increased amid the European heat waves, Russia has expanded its export restrictions to include gasoline, jet fuel and diesel following damage to its refining facilities. Meanwhile, refinery operations and exports in Middle East continue to be disrupt- Strait of Hormuz following the Middle East conflict. As a result, tight supply-demand conditions are expected to continue affecting market conditions through at least the end of this year and into next year. Accordingly, global refining margins are expected to remain firm for the foreseeable future. LBO market is also being significantly for Group III as tight supply in the Middle East continues to intensify. The Middle East accounts for approximately global Group III base oil supply capacity, and as a result, Group III spreads have reached record high levels. Given the disruptions to Middle Eastern LBO production facilities, the current supply tightness is expected to persist for an extended period even after the Strait of Hormuz reopens. More than 35% of the company's LBO production capacity consists of Group III products. Accordingly, the current strength in the LBO market is having a meaningful impact on our earnings. Based on current inventory levels and supply-demand conditions, the company expects market conditions for the refining and lube businesses to remain firm throughout the second half of the year. Last is the progress of Shaheen Project. The company is currently verifying mechanical completion through site inspections, equipment performance checks, and reviews of submitted documents to verify whether the requirements for mechanical completion have been met. At the same time, pre-commissioning and commissioning activities are underway, with a startup scheduled to follow and commercial operation targeted for earlier next year. On the marketing side, annual supply agreements for olefin monomers have been secured with customers, while additional contracts are being pursued to expand the customer base. Commissioning is planned in line with Shaheen startup. For PE, quality evaluations are being conducted through pre-marketing while marketing efforts are underway for early securing key domestic customers. We will keep you updated on project. This concludes our presentation. Thank you. Q&A session will begin. Please press asterisk and one. That is asterisk. For cancellation, please press asterisk two. That is asterisk and two on your phone. The first question will be given by Shin Hong-j oo from Shinyoung Securities. Please go ahead. [Non-English content] Good morning. I have three questions, thank you for the opportunity to pose my questions. First is your outlook on the refining business in the second half of the year. How will the company respond to the escalating Middle East, namely a possible closure of the shipping route in the Red Sea? How are you going to counter these risks in terms of sourcing crude? My second question has to do with your understanding and market intel on the global refining facilities by the war in Iran and Ukraine's drone attacks against refining facilities in Russia. How will this affect the overall market supply and demand conditions to evolve after the end of the war? My third question is your CapEx plan for this year and in 2027. Thank you. [Non-English content] To answer your first question on the refining market conditions in the second half of the year, as was also explained by the IR Team Leader, for a number of reasons. First of all, we are seeing exports from the Middle East being contracted because of the war. Russia's refining facilities are also disrupted because of the drone attacks from Ukraine, this subsequently moved the Russian government to impose restrictions on jet fuel and diesel exports. China is also restricting its exports of refined products. [Non-English content] [Non-English content] We don't expect this situation to clear itself in the short term. At least until the end of the year and even in 2027. [Non-English content] In response to the company's crude sourcing due to- We are actually coming up with various response measures to this. We have been securing crude through a different shipping route from the Yanbu Port, we've also utilized the Saharan Blend. We also secure crude oil from the Fujairah port as an alternative. We're also securing crude oil from Saudi crude oil stored in Ulsan, we also lease the government stockpile oil. These are all the measures that we are working on in response to the crude sourcing. [Non-English content] Again, we are using the detour shipping routes since the war broke out. We're also looking into various supply scenarios and countermeasures under the assumption that there will be some disruptions in the shipping routes from the Red Sea. If we opt for the detour, this could delay the crude arrival to South Korea by about 30 days. We'll come such as leasing the stockpile crude oil from the government and tapping into spot crude oil on a contingency basis. [Non-English content] By doing so, we'll be able to minimize the impact of the disruptions in the shipping routes. Even if there are, again, disruptions in the shipping routes from the Red Sea. [Non-English content] To answer your second question, we understand that there have been quite sizable disruptions in the operation of refining facilities in Russia because of Ukraine's continued drone attacks on Russia's refining facilities. As of July this month, about 40% of Russia's refining capacity has been hit by the drone attacks, and in terms of the utilization rate, it is equivalent to about 36%. [Non-English content] Subsequently, the Russian government exports of refined products. In June, they announced banning the exports of jet fuel, which will continue until November this year. They also recently made the announcement that export ban of gasoline and diesel will be extended until January next year. [Non-English content] In relation to the war in Iran, we cannot have a clear information on how because there is direct attack on the refining facilities in the Middle East. The supply disruptions of crude oil from the Middle East had an indirect impact on the global utilization rate of the refineries. [Non-English content] Based on the outlook from the institutions, the damage and the disruptions done to the refining facilities in the Middle East was very heavy right after the start of the war. As for the size of disruption, it was roughly 2.3 million B/D in July, but they believe that it will slowly clear down to 1 million B/D in October this year. However, this is all subject to change depending on the situation in the Strait of Hormuz and the Red Sea. [Non-English content] To sum up, the global refining facilities are disrupted, but they vary to some degree from one region to another. Subsequently, the inventory level is also off the normal level compared to the past. Therefore, it will take time before the market comes back to the pre-war supply conditions. [Non-English content] To answer your third question on the CapEx outlook. This year, as you know, the Shaheen Project is progressing well. As was shared with you earlier, our CapEx for this year is KRW 2.1 trillion. [Non-English content] This year we are going to wrap up Shaheen Project, and in 2027, most of the CapEx will be the ordinary CapEx around maintenance and repair, and we don't have any major investment plan for 2027 so far. [Non-English content] At the moment of setting the budget for 2027, and once the final numbers are out, we will share them with you. [Non-English content] This concludes my answer on your third question. [Non-English content] The following question is by [inaudible] from Samsung Securities. Please go ahead. [Non-English content] I have three questions. Thank you for the opportunity to pose questions. First, of kerosene and diesel margin since June, what is your outlook on the sustainability of this? My second question has to do with Shaheen Project. You explained about Shaheen Project. Could you just walk us through in more detail about Shaheen Project and when it will go into commercial operation? Also explain to us about the government's petrochemical restructuring policy in Ulsan. My third question has to do with the dividends. The company's performance has recently improved significantly. How much do you think that this will reduce the company's borrowing? Do you think this will also raise the company's dividend? If so, when and by how much? [Foreign language]. [Non-English content] To answer your first question, I believe there are number- In the supply side, this is also affecting the diesel and kerosene margin. The kerosene and diesel exports from the Middle East have been contracted because of the war, and the refineries in Asia are sourcing lighter crude oil, which is affecting the overall utilization rate and the supply of kerosene and diesel. [Non-English content] [Non-English content] We are seeing quite sizable disruptions in Russia's refining facilities because of Ukraine's drone attacks. This is a - of kerosene and diesel, and so is China, which is also restricting its exports as well. As a result, the kerosene and diesel spread, which was in the upper $30 level in Q1, has shot up to $60 level in Q2. As the middle of July, the spread further widened to over $70 at the moment. [Non-English content] We do not think this disruptive situation will clear itself in the short term. It is likely to continue in the midterm. We are expecting this bullish continue towards the second half of the year. [Non-English content] To answer your question on Shaheen Project, Shaheen Project targets commercial operation as early 2027. [Non-English content] To walk you through on June 30th, the EPC contractors have submitted to the company the documents related. We are now in the process of checking the process of field inspection and verifying the performance of the equipment and also verifying the documents submitted by the EPC. [Non-English content] Given the fact that this is a mega project, we are doing the verification work unit by unit and step by step. In parallel with this, we are also in the process of pre-commissioning and commissioning work. Our plan is to complete the commissioning and the startup in the fourth quarter of this year. As I said earlier, we are going to go into commercial operation from early 2027. [Non-English content] Speaking of the petrochemical restructuring in Ulsan, the company is fully aligned with the government's policies to make the petrochemical industry more competitive, and we are closely cooperating with the government's restructuring policy. However, we are with the restructuring solution. [Non-English content] Well, as you know well, Shaheen Project is very cost competitive, which means it will have very competitive facilities. At the moment, the companies involved have different interests, so it is taking some time before the companies involved are coming up. [Non-English content] Going forward, the company will continue to avail all the company-wide resources and capabilities to ensure safe completion and stable operation of Shaheen Project. At the same time, we will fully align ourselves with the government policies. [Non-English content] To answer your third question on the company's plan to downsize the borrowings and any plans to raise dividends based on the strong performance that the company has been recording recently. Well, our plan structure by reducing the borrowings based on the strong earnings that we have been making recent. [Non-English content] As you know, investment into Shaheen Project is almost over. However, how much we will reduce the borrowings will be up to the company's income size and the working capital, which is affected by the oil price. However, in the long term, our plan is to keep the debt-to-equity ratio in the range of 80%-100%. [Non-English content] For this year's dividend, it will be paid with the payout ratio maintaining at 20% or above. However, when the company's earnings go up, it will increase correspondingly. As for the dividend payout ratio from 2027 and onwards, we are going to develop the dividend guidelines in the future, we will share them with you in 2027. [Non-English content] The following question is by [inaudible] from Shinhan Investment Securities. Please go ahead. [Non-English content] Thank you for the opportunity to pose some questions. I have three questions. First is the inventory gains and loss in Q2. Was this affected by some one-off factors such as maximum price cap? Second question is, what do you think the sudden plummeting OSP, how do you think this will affect the company's performance in the second half of the year? Do you think the OSP could recover and go up again because of the renewed geopolitical risks in the Middle East? My third question is: What is your outlook on the base oil business in the second half of the year and for 2027? Also, any outlook on the expansion? [Non-English content] To answer your first question on the inventory gains and loss in Q2 and the one-off impact. As I presented earlier in Q2, the inventory related gains is KRW 113.7 billion, the FX related is KRW 116.8 billion. [Non-English content] As I said earlier, in Q2, most of the inventory gains came from the lube base oil business. In the refining business, even though the international oil price at the end of June was lower than that at the end of March, it recorded a slight positive because we treated the crude oil from the inventory, the OSP of crude oil treated in June was high. In the petrochemical business, it was slightly negative because of reduced naphtha price in Q2. [Non-English content] As for the impact from the maximum price cap, as you know well, the government made the announcement on this policy, and it is still ongoing. [Non-English content] The government also made the notice about compensating the refiners' loss later. It will deliberate this on a quarterly basis in the government-led committee and also compensate. We understand that the government made an extra budgeting to compensate for the refiners' loss. Subsequently, the company expects compensation as a result of the maximum price cap with some time lag. However, the amount of loss on the formula and the assumptions. At the moment, the government organized the related guidelines on what kind of documents need to be submitted to the government and how to estimate the loss and the compensation to the refiners is all fluid, and therefore we cannot arrive at any conclusive facts at the moment. Your second question about the OSP. Since the company mostly sources Saudi crude oil, lower OSP has a direct impact on the company's margin in a positive note. As we've been seeing very high volatility in the OSP movement lately. The Saudi crude OSP for May lifting went up by $17 from the previous month, which is the record high ever. It went turned down from June as the geopolitical risks in the Middle East subsided and the OPEC+ moved towards raising the output. In particular, the OSP for dollars from the previous month, which is also the lowest cut ever in history. We are expecting the OSP to remain quite volatile going forward. If the of the Red Sea being blocked on top of the Strait of Hormuz, there is the risk related to crude sourcing from the Middle East. If the Red Sea is indeed blocked, the Saudi crude will have to make a detour through the Suez Canal and all the way to the African continent, which will extend the transportation period and add additional burden and pressure to Asian refiners in terms of freight and working capital. This could move the OSP both ways. Competitiveness. However, it could go up if there is restrictions in crude oil supply from the Middle East because of the blockade of the Red Sea. If the lockup of the Strait of Hormuz and the Red Sea are entirely and completely cleared, the oil producers in the Middle East could compete to secure their market share, in which case the OSP could remain quite low, just like the August lifting OSP. At this moment, it's very hard to predict how the OSP will be subject to the evolutions in the geopolitical situation in the Middle East. My third answer, your third question on the lube base oil supply. As I said in my presentation earlier, we are expecting this high lube base oil supply situation to continue at least until the end of the year or even next year, led mostly by Group III production and logistical disruptions in the Middle East. [Non-English content] We believe out of the three groups, Group III will lead the overall lube base oil market conditions. [Non-English content] As for the new capacity expansions, we believe the impact of capacity expansions will be limited until 2027. [Non-English content] Since lube base oil is not a commodity, it usually takes extra time before the new facilities impact the market. [Non-English content] At the end of 2025, there was a Group II expansion here in Singapore. However, we understand that there are some partial operational glitches there, and therefore it will take some time before the new facilities expansion impact the market. There is a scheduled facilities expansion for Group II and Group III in India, Saudi Arabia and Poland. However, the production could be adjusted or the schedule could be slightly delayed because of the war in the Middle East. [Non-English content] Therefore it will be maybe 2027 or the year after that when the new facilities start to seep into the market. That concludes my answer on your third question. [Non-English content] Thank you once again for showing your interest in S-Oil, I would like to thank all the analysts and investors for participating in the earnings release. Going forward, S-Oil will continue to engage in transparent and fair communications with the market. If you have any further questions, please feel free to contact the company's IR team. Thank you very much.