China Petroleum & Chemical Corp (Sinopec, 中國石化), Asia’s biggest refiner, unexpectedly posted a 6.7 percent increase in first-half profit as a rebound in China’s economy spurred demand for oil, gas and petrochemicals.
Net income at Sinopec, climbed to 35.46 billion yuan (US$5.22 billion), or 0.403 yuan a share, from 33.25 billion yuan, or 0.381 yuan, a year earlier, the company said in a statement to the Shanghai Stock Exchange yesterday. That compares with a median estimate of 32.4 billion yuan in a survey of 10 analysts compiled by Bloomberg.
Chinese refiners including Sinopec processed 18 percent more crude oil than a year earlier in the first six months, buoyed by an economy that grew 11.1 percent in the first half and surpassed Japan in size.
The Beijing-based refiner agreed in March to buy a stake in an Angolan field from its parent for US$2.5 billion to boost crude production and meet domestic demand.
“Sinopec is likely to purchase more quality oilfield assets from its parent company to boost earnings, and by doing so, the listed unit will be able to offset risks resulting from the government’s policy restrictions on the refining business,” Wang Aochao (王傲超), an analyst at UOB-Kay Hian Ltd (大華繼顯), said by telephone from Shanghai.
First-half oil-product sales rose 18 percent to 61.825 million tonnes, boosting overall revenue during the period by 75 percent to 936.5 billion yuan, according to Sinopec’s statement.
The Chinese government raised fuel prices by 4.6 percent in April, the only increase so far this year.
Natural-gas sales gained 33 percent from a year earlier to 4.14 billion m³ as Chinese demand for the cleaner-burning fuel increased.
For the full year, Sinopec may report a 3 percent increase in profit to 63.4 billion yuan, according to a median estimate of 17 analysts surveyed by Bloomberg.
China’s first-half fuel demand rose 12.5 percent from a year earlier while consumption of ethylene, used to make products from pipes to shopping bags, gained 9.6 percent, Beijing-based Sinopec said.
The country’s second-half demand for fuel and petrochemicals will rise at a steady pace, the refiner said in the statement.
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