S-Oil Corp., South Korea's third-largest refiner, said Monday its earnings skyrocketed 732.7 percent in the first quarter from a year ago as cheap oil prices improved cracking margins.

Net income came in at 211.25 billion won about (US$196.4 million) in the January-March period, compared with 25.37 billion won from a year earlier, S-Oil said in a regulatory filing.

Sales, however, declined 42.5 percent on-year to 4.37 trillion won, while operating profit gained 407.3 percent to 238.13 billion won, the firm said.

S-Oil said its operating margin reached 5.4 percent in the quarter, the highest since the third quarter of 2012, on the back of strong demand driven by low oil prices, despite some loss of value in crude stockpiles in January, according to South Korea's (Yonhap) News Agency.

In contrast, sales dipped due to increased crude stockpiles ahead of the seasonal maintenance in the second quarter.

Its net also increased as S-Oil was refunded 50 billion won in fines and accumulated interest from the state watchdog in February after the top court overturned an earlier ruling that convicted the company of price rigging.

The Fair Trade Commission in 2011 levied massive fines on S-Oil and three other refiners on charges of colluding each other to unfairly set prices in 2000.

Demand for petrochemical products were expected to shrink in the off-peak season in the quarter that ends in June, but regular maintenance by major Asian refiners will offset the falling shipment and maintain stable margins, the company said.