Sinopec: Jan-Sep Net Profit Down 30 Percent YoY to CNY 41.95 Bn

Source: Company Disclosure, ChinaScope Financial (Data)

+       According to the financial results released by China Petroleum & Chemical, also known as Sinopec (SNP: NYSE; 0386: HKG; 600028: SHA), on October 28, the company’s net profit attributable to shareholders in the January-September period decreased 30 percent year-on-year to CNY 41.95 billion, equivalent to a daily earning of CNY 153 million. Net profit attributable to shareholders in 12Q3 was CNY 18.25 billion, down 7.5 percent year-on-year.

+       Sinopec said the decrease in net profit was primarily due to rising prices of chemical raw materials and decreasing oil product prices.

+       In the first three quarters of 2012, Sinopec’s oil and gas production reached an equivalent of 318 million barrels of oil, representing a year-on-year growth of 4.92 percent. Crude oil production was 245 million barrels and natural gas production was 438.4 billion cubic feet, up 2.32 percent and 14.69 percent year-on-year respectively.

+       The oil refiner’s daily crude oil processing volume in the January-September period increased 0.46 percent year-on-year to 4.39 million barrels, while its total sales volume and retail sales volume of oil products was 128 million metric tons and 81 million metric tons, up 5.56 percent and 7.28 percent year-on-year respectively. However, the production of ethylene and synthetic resin decreased 4.51 percent and 1.10 percent year-on-year respectively

Increase in development, sales and financial expenses have eroded Sinopec’s margins and caused negative net profit growth since 11Q3. In the recent quarter, better control of operating and non-operating expenses has reversed the downward trend.

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