China's Sinopec (0386) reported a 39.8 percent drop in interim net profit due to lower oil prices, weaker fuel demand and as industry overcapacity weighs on margins at its chemicals business.
Sinopec, the world's largest oil refiner by capacity, reported on Thursday a net income of 21.48 billion yuan (HK$23.4 billion) for January to June, the lowest interim profit since 2020.
Its oil and gas output rose 2 percent year-on-year to 262.81 million barrels of oil equivalent, with gas up 5.1 percent to 736.3 billion cubic feet and crude oil output down 0.3 percent to 140 million barrels.
Sales of diesel, gasoline and aviation fuel dropped 6.7 percent, 4.9 percent and 8.3 percent year-on-year, respectively, reflecting the rise of electric vehicles and also cheaper natural gas replacing diesel.
"In the first half of 2025, global crude oil prices fluctuated lower, domestic gasoline and diesel demand was declining and chemicals margins remained thin," Sinopec said.
Sinopec projects crude throughput for July-December at 130 million metric tons, or about 5.16 million barrels per day. That compared with the first-half's 119.97 million tons or 4.84 million bpd.
Output of ethylene, a key building block for petrochemicals, rose 16.4 percent to 7.56 million tons in the first half, and the company sees production of 7.85 million tons in the second half.
While forecasting demand growth in natural gas and chemical products in the second half, Sinopec expects Chinese refined fuel demand to remain under pressure from "alternative energy sources".
Sinopec's Hong Kong-listed shares closed up 1.8 percent at HK$4.49. They have risen 0.9 percent year-to-date, while the benchmark Hang Seng Index has climbed 25.15 percent over the same period.
Reuters
