Sinopec posts sharp rise in profit as oil prices slip

HONG KONG: China Petroleum & Chemical, the biggest Asian oil refiner, said Sunday that its profit surged 66 percent in the first half of this year on rising demand for gasoline and chemicals and falling costs for crude oil.

Net income rose to 36.2 billion yuan, or $4.8 billion from 21.9 billion yuan a year earlier, the company, based in Beijing, said. Revenue rose 15.5 percent to 554.3 billion yuan.


The refiner, known as Sinopec, supplies almost two-thirds of the fuel sold in China, where the government forecasts gasoline consumption will rise 24 percent by 2010. An 8.1 percent decline in crude oil prices enabled Sinopec and rival PetroChina to end losses from making fuels and selling them at state- controlled prices.

“I expect significant headline earnings growth for Sinopec, given favorable comparative crude prices and strong contributions from the chemical segment,” Lei Wang, a co-manager of a portfolio that includes Sinopec shares at Thornburg International Value Fund in Santa Fe, New Mexico, said before the earnings announcement.

The company’s profit was above the median estimate of 35.1 billion yuan in a Bloomberg News survey of nine analysts.

Bloomberg News