Sinopec profit down 12% in 2012

China Petroleum and Chemical Corporation (Sinopec) reported higher operating revenues but lower profits in 2012. The company’s profit, other operating revenues and other income was RMB2,786 billion (US$450 billion), up 11.2% year-on-year. Operating profit was RMB98.6 billion (US$ 15.9 billion). Profit attributable to equity shareholders of the company was RMB63.9 billion (US$10.3 billion), down 12.8% year-on-year.
Sinopec saw growth in both oil and gas reserve and production, and showed significant results in unconventional oil and gas resource development through exploration activities conducted by the E&P segment in five key domestic regions, and achieved more than 100% replacement ratio of domestic oil and gas throughout the year.
The company officially launched its first shale gas pilot project with production capacity in Fuling. The segment’s operating profit was RMB70.1 billion (US$ 11.3 billion), a decrease of 2.2% over 2011.
The company processed 221 million tons of crude oil, an increase of 1.8% from 2011, and produced 133 million tons of oil products, up 3.9% from the previous year. The operating revenues of this segment totaled RMB1,270.9 billion (US$205 billion), an increase of 4.9% year-on-year, driven by increased sales volumes and increased product prices. Despite the recorded operating loss for the year of RMB11.4 billion (US$ 1.84 billion), gradual improvement in refining margins helped turn around the business in the second half of the year, leading to a loss reduction of RMB24.3 billion (US$3.92 billion) year-on-year.
In 2012, the total sales volume of oil products increased to 173 million tons, up 6.7% year-on-year. The segment’s operating profit was RMB42.7 billion (US$ 6.9 billion) in 2012.
In response to changing market demand, Sinopec adjusted facility utilization rate in a timely manner in 2012 to focus on high-value-added products. Production of ethylene fell 4.5% from the previous year to 9.45 million tons in 2012. The total sales of chemical products were 54.35 million tons, up 7.0% year-on-year.
In 2012, the operating revenues of the chemicals segment were RMB412.0 billion (US$66.5 billion), falling 2.0% from the year before. This was primarily due to the continuing low demand for chemical products as a result of macroeconomic downturn, which had led to a major drop in chemical product prices. Operating profit for the chemicals segment was RMB1.2 billion (US$193 million), a reduction of RMB25.5 billion (US$4.12 billion) or 95.6% year-on-year.
Looking into 2013, the world economy is expected to recover slowly, with a trend of tepid growth persisting under the complex and precarious environment. While the Chinese economy is showing signs of stability and improvement, its domestic petroleum and petrochemical product markets are still under pressure from both domestic and overseas macroeconomic conditions.
Sinopec plans to produce 46.43 million tons of crude oil and 18.1 billion cubic meters of natural gas in 2013.
The company plans refinery throughput and oil products output of 238 million tons and 145 million tons respectively. The target for total domestic sales of oil products is 165 million tons for 2013.
In the chemicals segment, the company plans to produce 9.83 million tons of ethylene in 2013.
(April 6, 2013)