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Abu Dhabi, UAEMonday 25 June 2018

Sinopec profits up by 40 per cent

Rise in international oil prices boosted Asia's biggest oil refiner's crude business

A Sinopec petrol station sign in Hong Kong. Vivek Prakash/Bloomberg
A Sinopec petrol station sign in Hong Kong. Vivek Prakash/Bloomberg

Asia's biggest oil refiner Sinopec said its first-half net profit jumped 40.1 per cent thanks to a rise in oil prices and stable growth in China's economy, which fuelled demand for its refined products.

Sinopec - the listed unit of state-owned China Petrochemical - saw net profit surge to 27.92 billion yuan (Dh15.42bn) in the January-June period, up from 19.92bn yuan in the year-earlier period, it said in a statement late Sunday to the Hong Kong stock exchange, where it is listed.

A pick-up in international oil prices boosted Sinopec's crude business, while domestic consumption of its key refined oil products rose and demand for major chemical products grew "significantly", it said.

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China registered stronger-than-expected economic growth in the first half, expanding 6.9 per cent in both the first and second quarters.

World oil prices have firmed up but remain half of what they were before a 2014 plunge fuelled by a supply glut, overproduction and a weak global economy.

Sinopec said strong economic growth will continue to drive demand for its products in the second half and create new growth opportunities.

Investors in Hong Kong seemed to ignore the figures, with shares in the firm falling 2.2 per cent, having climbed over the past week in advance of the earnings announcement.

But its shares in Shanghai, where it also is listed, gained 0.8 per cent.

Last week, Chinese oil giant PetroChina said its net profit skyrocketed more than 2,000 per cent in the first half and announced it would give the entire windfall to shareholders via a cash dividend.