China Petroleum & Chemical, also known as Sinopec, reported a net profit decline of over 19% in the first half of the year. The decrease can be mainly attributed to weak demand for certain chemicals and refinery products such as naphtha and petroleum coke.
Financial Results
For the period ending in June, Sinopec’s net profit stood at 36.12 billion yuan ($4.95 billion), while revenue experienced a slight decline of 1.1% on a yearly basis, reaching CNY1.59 trillion.
Factors Impacting Revenue
Sinopec highlighted several factors contributing to the decline in revenue. Lower prices for crude oil, refined oil products, and chemicals, along with reduced sales volume of petrochemical products, were the main drivers.
Future Plans
In the second half of the year, Sinopec has allocated CNY104.0 billion for capital expenditure. Over 39% of this investment will be dedicated to exploration and production activities.
According to the company, global geopolitics, supply and demand dynamics, and inventory changes are expected to result in medium to high fluctuations in international crude oil prices.
Sinopec predicts an improvement in China’s economy during the second half of the year. It anticipates an increase in domestic demand for refined oil products, as well as a gradual recovery in natural gas and chemical product markets.
