Chinese refining giant Sinopec Corp reported on Sunday a 20.1% fall in interim net profit for the first half of the year compared with the year-ago period, to 35.11 billion yuan ($4.82 billion), on lower crude prices despite higher refinery output and growth in fuel sales.
Sinopec, the world’s largest refiner by capacity, reported revenues of 1.59 trillion yuan for the six months, down 1.1% from the year earlier level.
During the period, Sinopec processed a total of 126.54 million metric tons of crude oil, up 4.8% versus a year ago, and its refined fuel sales rose 18.5%, 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% year-on-year increase in the first three months, led by gasoline and aviation fuel as people travelled more.
Demand for diesel fuel, however, remained under pressure from an ailing property sector and as weakening merchandise exports curbed trucking.
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.
Sinopec produced 139.68 million barrels of crude oil during the six months, up 0.02% year on year, while its natural gas output gained 7.6% to 660.88 billion cubic feet.
The company’s refining margin was 354 yuan ($48.57) per ton in the first half of this year, down 33.6% from a year earlier, it said.
Capital expenditure for the half-year came in at 74.67 billion yuan, versus 64.65 billion yuan a year earlier. Sinopec has been stepping up exploring geologically more challenging reserves, like the Bazhong tight gas field and more shale gas acreage in Sichuan.
Its Hong Kong-listed shares have risen 14.4% year-to-date, outperforming Hang Seng Index which has fallen 10.9% during the period.
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