PetroChina's Q1 profit up 5.8pc
PetroChina, the nation's largest oil-and-gas producer, posted a 5.8 per cent year-on-year rise in first-quarter net profit, as sharply higher profit from oil-and-gas production was mostly offset by widened losses in oil-refining and gas-import operations.
Net profit rose to 39.15 billion yuan (HK$48.15 billion) from 37 billion yuan in the year-earlier quarter. Revenues increased 17.9 per cent to 525.65 billion yuan.
Operating profit from oil-and-gas production surged 31.6 per cent to 60.38 billion yuan on the back of a 3.6 per cent increase in oil output to 227 million barrels, and a 14.8 per cent jump in the average crude-oil selling price, to US$105.48 per barrel. Natural-gas output grew 11.2 per cent to 710.9 billion cubic feet, while the average selling price climbed 9.9 per cent to US$4.87 per thousand cubic feet.
The group's operating loss on oil refining and chemical production widened to 10.82 billion yuan, from 3.69 billion yuan in the year-earlier period. Fuel and chemical distribution's operating profit tumbled 21 per cent to 6.06 billion yuan, reflecting the weak global economy, and the operating profit for gas-distribution and pipeline operations dived 71 per cent to 2 billion yuan.
Analysts expect profit at PetroChina and its rival, China Petroleum & Chemical (Sinopec), to be pressured by Beijing's control of retail-fuel prices, which have risen less than crude prices because the government wants to combat inflation.
'We expect refining margins to remain weak in [this year's first-half], despite the increases in product prices announced in the first-quarter,' said Sanford Bernstein analysts Neil Beveridge and Lou Ying in a research report. 'Reform of product pricing continues to look unlikely at current oil prices.'
They also expected that PetroChina's benefits from gas price increases in Guangdong and Guangxi this year would be offset by higher gas imports from Turkmenistan in Central Asia, which is a loss-making business because Beijing also kept domestic-gas prices below international levels.
PetroChina vice-chairman Zhou Jiping has said the group planned to raise gas imports to 28.2 billion cubic metres of gas this year, from 17.3 billion last year.
Sinopec's first-quarter profit was also hit by a sharply higher refining loss and much weaker profit from chemicals. Net profit tumbled 35 per cent year-on-year to 13.41 billion yuan, despite revenues rising 14 per cent to 671.37 billion yuan.
Operating profit from oil-and-gas production jumped 48.8 per cent to 19.55 billion yuan, thanks to a 4.5 per cent rise in crude-oil output and an 11.8 per cent rise in gas output. The average oil selling price jumped 23.8 per cent to US$106.1 a barrel, while gas prices rose 3.3 per cent to US$5.64 per thousand cubic feet.
This was more than offset by an operating loss on oil refining of 9.17 billion yuan, which compared to a loss of 0.58 billion yuan in the year-earlier period.