Tear Sheet: Korea National Oil Corp.

We believe Korea National Oil Corp. (KNOC)?s operating performance will moderate in the second half of 2024, leading annual EBITDA and profitability to decline for 2024. Curtailed demand due macroeconomic uncertainties could weigh on oil prices. KNOC?s revenue (KRW1.9 trillion) and EBITDA (KRW1.0 trillion) for the first half of 2024 were higher than in the previous year and our estimates, largely on the back of oil prices sustaining at high levels. We believe KNOC?s debt-to-EBITDA ratio will increase modestly in 2024-2025. Waning oil prices will likely lead to EBITDA compression. Moreover, we expect debt to remain high because the company will likely maintain high levels of capital expenditure (about KRW800 billion per annum), with operating cash flow only partially covering

...Rating Component Scores Foreign currency issuer credit rating ##/Stable/-- Local currency issuer credit rating ##/Stable/-- Business risk Satisfactory Country risk Low Industry risk Moderately High Competitive position Satisfactory Financial risk Highly Leveraged Cash flow/leverage Highly Leveraged Anchor b+ Diversification/portfolio effect Neutral (no impact) Capital structure Neutral (no impact) Financial policy Neutral (no impact) Liquidity Adequate (no impact) Management and governance Neutral (no impact) Comparable rating analysis Positive (+1 notch) Stand-alone credit profile ##- Likelihood of government support Almost certain (+10 notches from SACP)...

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