Sinopec's third-quarter profit drops a third on fuel glut, lower oil prices



BEIJING/SINGAPORE (Reuters) – Sinopec Corp, Asia’s top refiner, posted a 35% fall in third-quarter net profit versus a year earlier, according to Reuters calculations based on a company filing, dragged down by narrowing refining margins and weaker global oil prices.

The decline follows the launch of two privately owned mega-refineries and the expansion of other major refining plants, which added to the fuel surplus in China’s refined oil market, slashing profit margins for oil processors.

Sinopec (SS:) (HK:) reported 11.94 billion yuan ($1.69 billion) net earnings for the July-September period, down just over a third from the same period last year.

In the first nine months of 2019, Sinopec’s net profit was down 27.8% year-on-year at 43.28 billion yuan under Chinese accounting standards, while revenue reached 2.23 trillion yuan, up 7.7%, the company said in its filing on Wednesday.

During the same nine-month period, Sinopec produced 212.78 million barrels of , down 1.6% from a year earlier, and 773.41 billion cubic feet of , up 8.4% on the year.

Sinopec, among China’s top three importers of natural gas, recorded a 5.5 billion yuan loss in the imports of 10 million tonnes of the fuel over the first three quarters, it told analysts in a briefing on Thursday, without giving a year-on-year comparison.

Despite a weaker global gas market, however, the company managed to lift sales prices to an average of $6.19 per thousand cubic feet during the period, up from $5.91 a year earlier.

Capital spending in the company was 78 billion yuan over the first three quarters, mainly for shale gas exploration in southwestern China and oilfield expansion in the northwestern part of the country, as well as the construction of its Zhanjiang integrated refinery in Guangdong.

READ  UPDATE 1-Soccer-Everton sign striker Kean from Juventus on five-year deal

Company officials said on Thursday that capital spending so far accounted for 57% of the annual budget and the company expects to step up spending in the fourth quarter to meet its target for the year.

($1 = 7.0555 yuan)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here