SINGAPORE: China’s Sinopec Corp’s first-quarter profit fell by 27.6% versus a year earlier, the company said on Monday, weighed down by lower oil prices and as its refining operations grappled with declining fuel sales and thin margins.
Formally known as China Petroleum & Chemical Corp, Sinopec’s net income stood at 13.26 billion yuan ($1.82 billion) between January and March, according to a filing with the Shanghai stock exchange based on Chinese accounting standards.
Gasoline consumption in the world’s second-biggest consumer is most exposed to competition from electrification, while diesel demand is constrained by China’s still struggling economy.
Sinopec, the world’s largest refining group by capacity, said overall China’s refined fuel demand declined 4% year-on-year during the first three months.
Its crude oil throughput fell 1.8% during the period to 62.13 million metric tons, or 5.04 million barrels per day.
Total refined fuel sales dropped 7.1% at 55.59 million tons, which includes domestic sales at 43.2 million tons, down 5.3% on the year.
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Sinopec’s output of ethylene, a building block for producing petrochemicals, rose 17.7% during the period to 3.86 million tons, reversing two consecutive annual falls in the previous two years for the three-month period.
The chemical department, however, logged a quarterly loss of 1.32 billion yuan, as the business faced a “severe market environment of continuously low margins”.
Crude oil production fell 1.2% on the year to 69.53 million barrels, or about 773,000 bpd, while that of natural gas expanded 5.1% to 368.4 billion cubic feet.
Capital expenditure, at 18.25 billion yuan, was down from 20.5 billion yuan a year ago. Of the total, 70% was allocated to its upstream department for developing oil projects, such as Jiyang in east China and Tahe in the northwest, as well as Fuling shale gas project in southwest China.
Sinopec’s Hong Kong-listed shares closed on Monday up 0.25%, having lost 11.5% so far this year.
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