Sinopec’s Q3 profit tops estimates, rising 14pc to US$1.7 billion
The refiner says China’s domestic demand for petrol and kerosene maintained strong growth momentum in the first three quarters
China Petroleum&Chemical (commonly known as Sinopec), the world’s second largest oil refiner by capacity and a major producer of oil and gas, saw net profit increase 14 per cent in the third quarter from a year earlier, above analysts’ estimates.
Net profit attributable to equity shareholders was 11.3 billion yuan (US$1.7 billion) for the three months through to September, up 14 per cent from 9.9 billion yuan in the same period a year earlier. The figure was above the average estimate of 9.75 billion yuan by two analysts in a previous Bloomberg poll.
For the first nine months of the year, net income jumped 32 per cent year on year to 38.4 billion yuan.
“In the first three quarters of 2017, global economy recorded modest recovery and Chinese economy maintained steady growth with gross domestic product up by 6.9 per cent year on year,” the company said in its filing to the Hong Kong exchange.
“Domestic consumption of refined oil products increased 6.6 per cent compared with same period last year, among which petrol and kerosene consumption maintained strong growth momentum.”
Domestic demand for natural gas accelerated 16 per cent year on year, while sales of major chemicals, particularly ethylene equivalent, also recorded strong growth, it said.
In the third quarter, total operating income rose 19 per cent to 579 billion yuan. For the first three quarters, the figure was up 28 per cent to 1.74 trillion yuan.
Industry benchmark Brent oil recently traded above US$60 a barrel for the first time in more than two years. US West Texas Intermediate crude also hit the highest level in eight months.
Oil prices have received a boost from strong demand this year as the global economy enjoys a broad-based period of growth in years.
Production cuts by the Organisation of the Petroleum Exporting Countries (Opec) and other major oil producers such as Russia also helped with the increase.
On Monday, Cnooc, China’s largest offshore oil producer, posted a 17 per cent jump in oil and gas sales revenues for the third quarter, thanks to rising oil prices.