Sinopec profit rises 2pc to 37.1b yuan

Agencies and staff reporter

Sinopec, China's top oil refiner, reported its net profit in the first half increased by 2.6 percent to 37.1 billion yuan (HK$40.59 billion) year-on-year, as a better performance from its upstream operations offset weakness in refining and petrochemicals.

Sinopec said it would pay 0.146 yuan per share for the interim dividend and declared that the cash dividends ratio won't go lower than 65 percent in future three years.

Morgan Stanley upgraded the company to equal weight earlier this month due to sustainable high yields and structural growth in gas.

The company saw its sales fall 1.1 percent to 1.58 trillion yuan. Meanwhile, production of ethylene, a key building block for petrochemicals, fell 5.5 percent during the first half.

Crude oil output rose 0.6 percent on the year to 140.53 million barrels, Sinopec previously reported, while natural gas production rose 6 percent to 700.57 billion cubic feet. The company processed 126.69 million tonnes of crude oil, about 5.08 million barrels per day, up 0.1 percent from the same period last year, it said in a stock market filing in July.

That compared with 1.7 percent growth in the first quarter. The slowdown was driven by higher crude prices and tepid domestic fuel demand.

An expansion in Chinese refining capacity has coincided with faltering demand this year, resulting in a glut of oil products that's weighed on margins. Greater uptake of electric vehicles and the increasing popularity of liquefied natural gas-powered trucks is also eroding consumption of gasoline and diesel.