Sinopec H1 profit sharply down 40.5%

China Petroleum and Chemical Corporation, the country's largest oil refiner, said on Sunday that its net profits for the first half of the year dropped 40.5 percent year-on-year to 24.5 billion yuan ($3.89 billion).

Earnings per share shrank 40.6 percent to 0.282 yuan from a year earlier, said the company in a statement filing to the Shanghai Stock Exchange.

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

The oil giant attributes the sharp decline in profits to significant rise in crude oil prices and restricted prices of gasoline and diesel products, which further worsened the company's loss from oil refining.

The drop in the prices of petrochemical products has also reduced profits, it added.

In the first six months of this year, the company's crude output increased 4.3 percent to 163.09 million barrels, since maintenance activity affected overseas production in the same period last year.

Natural gas production surged 14.1 percent to 289.78 billion cubic feet from January to June, while sales of petrochemical products rose 4.2 percent to 26.15 million tons, it said.

Sinopec expected that the Chinese government will put more efforts on stabilizing growth in the second half of the year, which will bring more infrastructure investment and stimulus on consumption, and in turn gives rise to domestic demand of both refined oil products and petrochemical products.

This will offer a favorable condition for the company's operation expansion, said Sinopec.

The company planned to produce 163.75 million barrels of crude oil in the second half and 293.07 billion cubic feet of natural gas.

PetroChina Co, another Chinese oil giant, said on Aug 23 that its net profits dropped 6 percent from a year earlier to 62.02 billion yuan in the first six months, due to government control over domestic refined oil prices and rising costs.