China’s Sinopec Reports 2.7% Rise in Net Profit in First Half of Year
China Petroleum & Chemical Corp, also known as Sinopec, announced a 2.7% increase in net profit for the first half of the year, driven by higher oil prices.
The company reported a net income of 37.1 billion yuan ($5.21 billion) for the period from January to June. Despite a 1.1% decrease in sales to 1.58 trillion yuan, Sinopec’s profit was boosted by the rise in oil prices.
However, production of ethylene, a key petrochemical component, declined by 5.5% during the first half. Capital expenditure for the period was 55.9 billion yuan.
Crude oil output increased by 0.6% to 140.53 million barrels, while production rose by 6% to 700.57 billion cubic feet. The company processed 126.69 million metric tons of oil, equivalent to 5.08 million barrels per day, showing a slight increase from the previous year.
The growth rate in the first half was lower compared to the first quarter, mainly due to higher crude prices and weaker domestic fuel demand.
Overall, Sinopec’s performance in the first half of the year was positively impacted by rising oil prices, leading to an increase in net profit despite some challenges in production and sales.
($1 = 7.1244 renminbi)
Analysis:
In the first half of the year, China’s Sinopec, the world’s largest oil refiner, reported a 2.7% increase in net profit, reaching 37.1 billion yuan. This growth was driven by higher oil prices, despite a slight decrease in sales. The company faced challenges in ethylene production, which declined by 5.5%, and saw a lower growth rate compared to the first quarter due to higher crude prices and weaker domestic fuel demand. However, with rising oil prices impacting its performance positively, Sinopec was able to maintain a strong financial position in the first half of the year.