HONG KONG: Sinopec Corp posted its first quarterly loss since becoming a public company in 2000, hit by a slide in global crude oil prices and flagging domestic demand.
Asia's largest refiner said in a separate statement on Sunday it expected that impact to continue, warning it might only break even in the first quarter as its margins took a hit from higher-cost crude purchased earlier.
Sinopec reported a worse than expected fourth-quarter net loss of 5.3 billion yuan ($854.3 million), against a net profit of 13.8 billion yuan in the same period a year earlier, according to Reuters' calculations.
The average of four analysts' forecasts for the quarter was a loss of 1.5 billion yuan, Thomson Reuters data showed.
Full-year net profit dropped by 29.7 percent to 46.5 billion yuan, Sinopec said in a filing with the Shanghai bourse, against an average forecast of 57.2 billion yuan from 25 analysts polled by Reuters.
The company attributed the earnings slide to a sharp decline in crude prices and a sluggish petroleum and petrochemicals market.
Like many other oil majors, Sinopec has been hurt by a more than 50 percent fall in crude prices since June, with analysts saying that the drop could have also hurt the value of the company's crude inventories.
The company has been suffering overcapacity in the domestic refining and chemicals markets as a result of China's economic slowdown. Its refining division lost 1.98 billion yuan last year, against a profit of 9.7 billion yuan a year earlier, as China cut oil products prices 11 times in 2014 to reflect lower crude prices.
Sinopec's exploration and production division booked an operating profit of 46.3 billion yuan in 2014, down 15 percent year on year.
Its chemicals business lost 2.2 billion yuan last year, compared with a 631 million yuan profit in 2013, while profit at its fuel retailing and distribution business fell 16 percent to 29.8 billion yuan.
Sinopec signed a deal last year to sell a $17.5 billion stake in its the retail and distribution business, which includes 23,000 petrol stations across China, marking the country's biggest privatisation push since President Xi Jinping came to power almost two years ago.
The company plans to cut capital expenditure by 12 percent to 135.9 billion yuan this year and has said it would put more emphasis on investment quality and efficiency, mirroring rival PetroChina and the wider sector.
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