Sinopec Shanghai Petrochemical posted a 93.5 per cent jump in net profit last year, although prospects for this year are clouded by surging raw material costs and a prolonged freeze in fuel prices.
Owing to rising crude oil prices and a severe mismatch between mainland petroleum product prices and crude oil prices, the firm forecast a substantial loss in oil processing in the first quarter despite a 247.3 million yuan (HK$275 million) government subsidy. It made a profit of 1.06 billion yuan during the same period last year.
The company, which operates China Petroleum & Chemical Corp's (Sinopec) second-largest refinery in Shanghai, had a net profit of 1.634 billion yuan, up from 844 million yuan in 2006 based on Hong Kong accounting standards.
This is 6.6 per cent below the 1.75 billion yuan mean estimate of 12 analysts in a Thomson Financial poll.
Turnover grew 8.69 per cent to 54.25 billion yuan.
The gap between domestic and Singapore ex-refinery petrol prices has widened to 23 per cent and diesel to 36 per cent, Deutsche Bank says in a report.
Sinopec Shanghai imports all the crude it processes and has benefited from a 4 per cent appreciation of the yuan against the US dollar so far this year, raising its refining break-even point to US$83 a barrel of oil based on the Brent benchmark, the bank estimated.