Sinopec first-quarter net income up 28pc on higher oil prices, stable fuel sales

Sinopec (0386) reported 28 percent year-on-year growth in first-quarter profit as higher global oil prices brought on by the Iran war increased the value of its crude inventory and the refiner maintained stable fuel sales.

Formally known as China Petroleum & Chemical Corp, Sinopec’s net income stood at 17 billion yuan (HK$19.5 billion) between January and March, according to a filing with the Shanghai stock exchange based on Chinese accounting standards.

Sinopec’s crude throughput during the period was at 62.02 million metric tons, or 5.03 million barrels per day, down 0.2 percent versus a year earlier.

Sinopec, the world’s largest refining group by capacity, said last month it reduced throughput in March by 5 percent as the Iran conflict disrupted crude oil supply from the Middle East.

Total refined fuel sales dipped 0.2 percent on the year to 55.46 million tons, but the company managed to lift domestic sales by 0.6 percent to 43.42 million tons.

China twice limited hikes to domestic pump fuel prices to soften the impact from the war, which effectively also pinched the margins for refiners.

Sinopec’s output of ethylene, a building block for producing petrochemicals, fell 8 percent to 3.55 million tons during the period, as its chemical department faces an “unfavorable market environment of continuously low margins”.

Oil and gas output gained 0.4 percent to 131.5 million barrels of oil equivalent during the quarter, including 63.4 million barrels of crude oil pumped domestically, up 1 percent.

Natural gas production edged up 0.4 percent to 370 billion cubic feet.

Capital expenditure came in at 25.17 billion yuan, rising from 18.25 billion a year earlier. Of the total, 62 percent went to its upstream division developing oil projects in Jiyang in east China and Tahe in the northwest, as well as natural gas projects in southwest Sichuan.

Sinopec’s Hong Kong-listed shares dropped 1.7 percent so far this year, against a 0.2 percent rise in the benchmark Hang Seng index.

Reuters

 

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