Chinese oil refining giant Sinopec posts first half-year loss since listing in Hong Kong in 2000

China Petroleum & Chemical (Sinopec) posted its first ever loss over a half year as coronavirus pandemic lockdowns and the oil price crash continue to weigh on the oil giant’s earnings, even as the country’s economy recovers.

The net loss at Asia’s biggest refiner was 21.7 billion yuan (US$3.2 billion) compared with a profit of 32.2 billion yuan a year ago, the company said in a statement, citing international accounting standards. The company has never posted a half-year loss since listing in Hong Kong in 2000.

Sinopec’s capital expenditure increased to 45 billion yuan in the first half, compared to 42.9 billion yuan the previous year. It also lowered its full-year capital expenditure outlook by 10 per cent from the 143.4 billion yuan it projected earlier this year. The company said it will adjust investment decisions dynamically according to market changes.

The company announced a special dividend of 0.07 yuan per share after agreeing in July to sell equity stakes in its pipeline units to a new state entity for 47.1 billion yuan. Its total production decreased 0.4 per cent to 225.7 million barrels of oil equivalent, with overseas output down 8 per cent from the same period last year, while domestic production was unchanged.

Looking forward, the company plans to boost refining output in the second half as the economy continues to recover from the pandemic. Sinopec forecast that it will process 130 million tonnes of crude in the second half, compared with 111 million in the first half.