The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
China Petroleum & Chemical Corp., the world’s biggest oil refiner, posted 40 percent growth in first-half profit amid better earnings from its chemicals business as well as a narrower loss from producing oil and gas and lower financing costs.
Net income rose to 27.9 billion yuan ($4.2 billion) in the six months ended June 30, the Beijing-based company known as Sinopec said in a statement to the Shanghai stock exchange. That compares with an expected 25.5 billion yuan based on the average of three estimates compiled by Bloomberg and the highest semi-annual profit since the first half
of 2014. Revenue climbed 33 percent to 1.17 trillion yuan.
Sinopec, which boosted oil processing in the first half, has benefited since the oil price crash began in 2014 as cheaper crude improves margins for its refining and chemicals units. While oil has lost about half its value in the past three years, prices averaged nearly $53 a barrel in the first six months of 2017, almost 30 percent more than a year ago.
That helped the state-backed giant improve results from its aging, high-cost crude fields even as it increases its focus on natural gas output to meet growing domestic demand.
“Higher crude prices lifted its production business while they cut into profit in the refining sector by raising crude purchase cost,†said Tian Miao, a Beijing-based senior analyst at Sun Hung Kai Financial Ltd. “Higher chemical product prices helped elevate Sinopec first-half performance, separating the refiner from its state-owned peers.†Sinopec shares on Monday fell 1.4 percent to HK$5.78 as of 9:48 a.m. in Hong Kong, compared with a 0.6
percent gain in the city’s
benchmark Hang Seng Index.
Other details from the Shanghai statement Sunday include: The company issued an interim dividend of 0.1 yuan per share, compared with a Bloomberg forecast of 0.11 yuan. Capital spending reached almost 16 billion yuan in the first six months. That’s well below half of the 110.2 billion spending pledged for this year.