(Aug. 24, 2009 - Chinavestor) Sinopec Corp. (NYSE:SNP), the largest refiner in Asia by volume, reported 2009 first six month net profit attributable to shareholders to reach RMB 33,246 million ($4.866 billion), representing an increase of 332.8% from same period last year. Most of the gains are attributed to two factors: lower cost of oil and improved margins. According to the company statement, outlook for the next quarter remains strong. "It is anticipated that the result of first three quarters of 2009 will be over 50% higher compared with the same period of last year."
The exploration segment produced 21 million tonnes of crude oil in the first six months of 2009, representing an increase of 1.2% year over year (YoY). The same segment produced 4,037 billion cubic meters of natural gas, a decrease of 1.8% YoY. The refining segment reported output for the fisrt six months of 2009 to reach 86.90 million tonnes, an increase of 1.8% YoY. According to company figures, Sinopec Corp. (SNP) has significant oil production of its own but it refines four times as much oil as it produces.
Significant change in profits is due to sharp decrease in the price of crude oil. Sinopec Corp. (NYSE:SNP) reported $51.60/barrel average cost of crude for the first six months of 2009, compared to $109.1/barrel in last year.
Source: Sinopec Corp.
In essence, hydrocarbon production and crude refining remained the same yet the company paid half the price for the crude it processed, keeping cost of revenue low. The same time gas price at the pump, one of the primary sources of income, remained virtually unchanged compared to crude price fluctuations. This in turn resulted in much improved margins for the first six months of 2009.
The Company announced dividend payable to shareholders of RMB0.07/share or $1.025/ADR distributed no later than October 15, 2009.
Industry rival Petrochina (NYSE:PTR) and CNOOC Ltd. (CEO) will report 2009 Q2 numbers in the last week of August.
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