Sinopec warns of tougher times ahead after profit falls 30pc in 2014
Nation's second-largest oil and gas producer saw net profit fall 30pc to 46.47b yuan last year on lower oil prices, its worst result since 2008
Energy giant China Petroleum & Chemical (Sinopec) said it faces tough challenges this year, after announcing its net profit fell 30 per cent for 2014, its worst performance since the global financial crisis.
"In 2015, influenced by China's new economic normal [slower growth] and low international oil price, the operating environment is still severe," the firm said in a statement to Shanghai's stock exchange last night.
Sinopec said it expects to be around break-even in the first quarter as it "digested high cost crude oil and refined oil product inventories" while crude oil prices plunged.
The company, the nation's second largest oil and gas producer, recorded a net profit of 46.47 billion yuan (HK$58.7 billion) for last year, from 66.13 billion yuan in 2013. It was its lowest profit since 28.5 billion yuan in 2008.
The earnings figure was 22.4 per cent less than the 59.85 billion yuan average estimate of 27 analysts surveyed by Thomson Reuters, likely due to unexpected hedging losses. The analysts had forecast its profit would fall further to 42.9 billion yuan this year due to lower oil prices.
Revenue last year declined 1.9 per cent to 2.83 trillion yuan.