Sinopec profit rises 65.5pc as refining surges
China Petroleum & Chemical Corp (Sinopec), the nation's second-largest oil and gas producer, reported a 65.47 per cent jump in net profit to 36.19 billion yuan in the first half of this year as growth in refining and chemical operations offset lower profits from oil and gas production.
Its net profit, which was marginally higher than the mean forecast of 35.14 billion yuan of five analysts, reflected the country's thirst for petroleum and related products and the group's efforts in minimising cost increases, Sinopec said.
However, margins on its refining business have been under pressure in the second half as the price of crude oil, which it imports to make fuel products, is hovering at high levels.
'It is expected that international oil prices will fluctuate at high levels in the second half of this year,' Sinopec said.
To ease the pressure of high oil prices on their margins, Sinopec and other mainland refiners are lobbying the National Development and Reform Commission for approval to raise retail petrol and diesel prices.
The firms have not been allowed to raise prices so far this year.
Sinopec's refining unit staged a dramatic turnaround to a 5.49 billion yuan operating profit in the first half from a 16.62 billion yuan loss a year ago on the back of tighter cost controls and lower oil prices early this year.
Its chemicals unit also did well with a 38.3 per cent rise in operating profit to 8.54 billion yuan. The two divisions cushioned a 34.1 per cent drop in operating profit from exploration and production to 22.75 billion yuan.
Operating profit from marketing and distribution rose 56.1 per cent to 16.79 billion yuan.
As a result, Sinopec's first-half operating profit rose 55.14 per cent to 53.34 billion yuan after a 12.4 per cent jump in operating expenses to 513.48 billion yuan and 15.39 per cent growth in turnover and other operating revenue to 556.83 billion yuan.
Earnings per share rose 68 per cent to 42 fen per share. The interim dividend was raised 25 per cent to five fen per share.
A Thomson First Call consensus of 23 analysts showed the full-year net profit would grow 18.23 per cent to 63.74 billion yuan this year.
Separately, Sinopec Shanghai Petrochemical said a surge in investment income and lower crude processing costs boosted net profit to 1.78 billion yuan in the first-half from 5.69 million yuan a year earlier.
Profit from operations was 2.17 billion yuan against a loss of 20.12 million yuan previously. Turnover grew 4.41 per cent to 26.82 billion yuan.