Sinopec's Q1 profit falls on subdued chemicals business
BEIJING, April 28 (Reuters) -China's Sinopec posted an 8.9%decline in its first-quarter profit, as rising raw materials costs and more competition hurt its petrochemical business, offsetting higher fuel sales and oil prices.
China Petroleum & Chemical Corp 600028.SS, 0386.HK as Sinopec is officially known, reported on Sunday a net income of 18.32 billion yuan ($2.53 billion) between January and March, according to a filing with the Shanghai stock exchange based on Chinese accounting standards.
The refining giant said crude oil prices have fluctuated upwards, and domestic demand for natural gas, refined oil products and petrochemical products grew compared to a year ago, but profits from petrochemicals were still muted as more production capacity came online and raw materials are costlier.
The world's largest oil refiner by capacity, Sinopec's first-quarter crude oil throughput rose 1.7% over a year earlier to 63.3 million tons, or 5.08 million barrels per day.
Its refined fuel sales expanded 6.5% to 59.81 million metric tons.
Sinopec said production of ethylene, a key building block for petrochemicals, declined 2% during the period, extending a 7.2% year-on-year fall during the same period of 2023 as competition picked up.
Crude oil production rose 1.3% on the year to 70.36 million barrels, while that of natural gas expanded by 6% to 350.46 billion cubic feet.
Capital expenditure was 20.5 billion yuan, down from 23.4 billion yuan a year earlier.
The company allocated 13.5 billion yuan in capital expenditure for its exploration and development segment, mainly to build crude oil production capacity in Jiyang and Tahe, natural gas production in western Sichuan, as well as LNG storage and transportation facilities in Longkou.
It will allocate 4.1 billion yuan for refining projects.
Sinopec CEO Dong Zhao told the CERAWeek energy conference last month that rising electric car sales will reduce refined product demand in China by 20 million tons per year, without giving a timeline.
As a result, Sinopec is eyeing new markets abroad, with plans to build its first fully-controlled overseas refinery in Sri Lanka, senior industry sources say.
(ton = 7.3 barrels for crude oil conversion)
($1 = 7.2464 Chinese yuan renminbi)
Reporting by Liz Lee and Colleen Howe;Editing by Elaine Hardcastle
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
