Sinopec net slides 19pc

Sinopec (0386) saw its net profit for the first half of the year slip 19.4 percent to 36.1 billion yuan (HK$38.8 billion) from a year ago and reduced the interim dividend by 9.4 percent to 14.5 fen.

The decline in profit is primarily attributed to lower oil prices and weakened fuel demand due to the sluggish domestic economic recovery.

Sinopec, the world's largest refiner by capacity, reported revenues of 1.59 trillion yuan for the first half of the year, down 1.1 percent from the year earlier level. Its operating profit fell by 14.7 percent year-on-year to 53.7 billion yuan.

During the period, Sinopec processed a total of 126.5 million tonnes of crude oil, up 4.8 percent versus a year ago and its refined fuel sales rose 18.5 percent to 116.6 million tons, the company said in a stock filing.

Domestic fuel demand extended recovery in the second quarter after a 6.7 percent year-on-year increase in the first three months, led by gasoline and aviation fuel as people traveled more.

Demand for diesel fuel, however remained under pressure from an ailing property sector and as weakening merchandise exports curbed trucking.

Meanwhile, crude prices were 24 percent lower than the year before, reducing the value of Sinopec's global oil and gas production.

Chinese refiners overall benefited from cheap crude oil supplies from Iran, Venezuela and Russia as Western sanctions forced those producers to sell oil at deep discounts to keep revenue flowing. Although state majors have shied away from Iranian and Venezuelan oil, Sinopec has been taking in Russian supplies, traders have said.

The company said in a separate stock exchange filing that it plans to spend 800 million yuan to 1.5 billion yuan on a share buyback on the A-share market. It declared an interim dividend of 14.5 fens a share compared with 16 fens a year earlier.