Sinopec's net profit for 2024 plunges 16.8% because of falling oil prices

China Petroleum & Chemical Corp, also known as Sinopec reported a 16.8% drop in net profit for 2024 on Sunday. The company cited lower crude oil prices, and the accelerated growth of the new energy vehicles (NEV) sector.

According to Chinese accounting standards and a filing on the Shanghai Stock Exchange, the world's biggest oil refiner based on capacity reported a net profit of 50.3 billion Yuan ($6.94billion)

Sinopec stated in its filing that "in 2024, the international crude oil price fluctuated downwards, and the domestic transportation industry increased the replacement of renewable energy...the gross profit margin was substantially narrowed."

"The company took multiple measures to adapt to market changes and continues to improve cost and expense controls."

This decline in net income is comparable to a drop of 9.9%, which also occurred in 2023 due to falling oil prices.

Diesel sales dropped 4.8% and gasoline fell 0.7%. Aviation fuel sales rose 7.3%. Both domestic and export sales were included in the figures.

The refinery's throughput dropped by 2.14% to 252 millions metric tons last year, which is equivalent to 5,06 million barrels of oil per day. The company predicted a rise of 255 million tonnes this year.

Sinopec's crude oil production is expected to reach 280.15 millions barrels in 2025, and its natural gas production will be 1,450.3 billion cubic foot.

The company stated that it had set aside a provision for asset impairment in the amount of 7.2 billion Yuan ($993.3 millions) by 2024, due to "market prices fluctuations of certain products, shutdowns of individual production units or losses of specific production facilities".

Sinopec’s petrochemical division saw a 19.8% increase in sales of plastics and chemical fibres.

Sinopec plans to spend 164.3 billion Yuan on capital expenditures this year, including key investments in exploration and development.

(source: Reuters)