Higher prices propel Sinopec to record 44.5b yuan profit

Bloomberg and staff reporter

Sinopec (0386) posted record first-half profits as higher global oil and gas prices outweighed a mixed market for fuel in China.

China Petroleum & Chemical Corporation, as the firm is officially known, said net income rose 11 percent to 44.5 billion yuan (HK$50.82 billion) in the first half of the year, an exchange filing showed. Oil and gas output rose 2.9 percent and diesel production increased 7.4 percent despite Covid lockdowns in China dampening domestic fuel demand.

The refiner's capital expenditure rose to 64.7 billion yuan in the first half, compared to 57.9 billion yuan in the same period last year. It is targeting a massive ramp-up in spending over the second half of the year to 133.4 billion yuan.

The company's strong first-half results came after fellow state-owned oil giants PetroChina (0857) and CNOOC (0883) saw profits soar on the back of higher energy prices. Brent crude prices were about 60 percent higher during the first half from the previous year.

Its core refining business was hit by pandemic lockdowns, with operating profit falling 24 percent from the same period last year. China's oil demand fell to near a two-year low in July.

However, Jutal Offshore Oil Services (3303), which manufactures oil and gas facilities, swung to a first-half net loss of 140.75 million yuan from a net profit of 98.3 million yuan within one year, citing reduced construction and falling new orders amid pandemic and geopolitical tensions.

The equipment maker said its revenue decreased 42.88 percent to 1.17 billion yuan.

The income from oil and gas dropped 30.4 percent to 1.03 billion yuan, while the turnover from other energy and the refinery and chemical segment declined 77.4 percent to 123.54 million yuan.