Sinopec's Q3 profits fall by 52.1% due to lower oil prices and refining margins

Sinopec, a Chinese refiner, reported a 52.1% drop in its net profit year-on-year to $8.54 billion yuan (US$1.2 billion) during the third quarter due to lower oil prices.

Sinopec, the world's biggest refiner based on capacity, reported 790.4 billion Yuan in revenue for its third quarter, a 9.8% drop from the year before, according to a filing made by the company.

CNOOC Ltd, a domestic oil and gas company that operates offshore and is a major competitor in China, reported an increase of 9% in its quarterly profit at 36.93 billion Yuan due to higher production and lower prices.

Sinopec processed between January and September 190.69 millions metric tons crude oil or 5.08million barrels per day. This is down 1.6% compared to a year ago, while the refined fuel production fell by 0.8%, reaching 116.6 million tonnes.

Diesel production fell by 10.7%, to 43.29 millions tons. Gasoline production rose by 4.1%, to 49.21 millions tons. Jet fuel output increased by 10.5%, to 24.1million tons.

In the first nine-month period, sales of refined fuels increased 0.6% on an annual basis to 181.67 millions tons. Domestic sales accounted for 138.06 millions tons of that total, a drop of 3.2%.

According to the company, China's apparent consumption for gasoline, jet fuel, and diesel fell by 1% in the first nine-month period, due to a decline in diesel demand. Natural gas consumption in China increased by 9.5% and ethylene demand grew by 3.9% during this period.

Sinopec produced 211.29 millions tons of crude oil in the first three-quarters of 2024. This is up 0.3% from the previous year. Natural gas production rose 5.6%, to 1,048 trillion cubic feet.

Capital expenditures for the first nine-month period were 86.35 yuan compared to 108.16 yuan in the previous period. Of this, 50.77 billion yuan went to exploration and developments, primarily in the company's Jiyang pilot shale field, in eastern China, in its Tahe oilfield, in Xinjiang and in its Chuanxi field, in Sichuan.

Chemicals segment weighed down results with a loss of 4.9 billion Yuan.

Sinopec shares listed in Hong Kong have increased 10.27% over the past year, underperforming the Hang Seng Index which has grown 20.84%.

(source: Reuters)