Sinopec reports drop in Q3 net profits


State-owned China Petroleum and Chemical Corporation (Sinopec), which is Asia's biggest refiner by volume and the third largest in the country, has reported 9.38 per cent drop in third quarter net profits to 18.33 billion yuan ($2.91 billion) from 20.2billion yuan in the same quarter last year.

Earnings per share shrank to 0.211 yuan in the third quarter from 0.282 yuan in the first half of this year, the company said in a statement filing to the Shanghai Stock Exchange on Sunday.

The figures were calculated according to the international financial reporting standards, the company said.

But if calculated according to the Chinese financial reporting standards, Sinopec's net profit fell 7.5 per cent year-on-year and stood at 18.25 billion yuan in July-September, reported Xinhua.

With higher cost of crude oil reducing refining margins and China's economic growth also slowing down, Sinopec's net profit for seven straight quarters has slowed down. Given the state monitoring of fuel prices, the company is unable to pass on the higher cost of imported fuel to consumers.

In September, China's government allowed a 6.1-6.5% rise in the price of refined petroleum products to reflect higher global oil prices.

For the first three quarters, Sinopec's net profit tumbled 30.24 per cent from previous year to 42.83 billion yuan according to the international financial reporting standards, and 41.95 billion yuan, according to China's standards.

In the January-September period, Sinopec's crude oil output increased 2.32 per cent from previous year to 245 million barrels, while natural gas production rose 14.69 percent to 438.4 billion cubic feet.

The output of refined oil reached 98.39 million tonnes, while sales of refined oil increased 5.56 per cent to 128 million tonnes, thecompany said.

In its half-year statement, the company had said it was targeting to produce 163.75 million barrels of crude oil in the second half and 293.07 billion cubic feet of natural gas.

"In light of the market situation, we have actively lowered the operation utilisation of our chemical facilities," Sinopec said.

The company reported that its output of ethylene, used to make plastic, decreased 4.5% to 7.02 million tonnes in the first nine months of the year.

Synthetic resin production also fell 1.1% to 9.96 million tones, offsetting benefit from the recent rises in gasoline and diesel prices.

Sinopec did not give a breakdown of the financial performance of its business divisions, but analysts say its chemical division was in the red in the third quarter compared with a profit of 7.3 billion yuan a year earlier.

That added to the loss faced by Sinopec in processing crude into oil products such as gasoline and diesel.

Sinopec did not disclose its refining loss for the third quarter on Sunday. It had reported a refining loss of 9.3 billion yuan in the second quarter and 10.9 billion yuan in July- September of 2011.

The company's oil and gas production rose 4.92 per cent in the first nine months to 318 million barrels of oil equivalent, Sinopec said.

Refining output averaged 4.39 million barrels per day, up 0.46 per cent.

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