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China Petroleum & Chemical Corporation, commonly known as Sinopec, said on Tuesday that it expects its net profit for the first half of 2018 to have jumped by around 50 percent on the year, on the back of higher oil prices, and according to Reuters calculations, the net incomes for both the first half and the second quarter this year would be the highest profit figures for the top Chinese refiner since 2013.
Sinopec, due to report audited figures for the first half of 2018 in August, said in a security exchange filing today that the key reason for the jump in the profits it expects was the fact that “In the first half of 2018, with the international oil price increased as compared with the corresponding period of pervious year, the upstream business of the Company improved significantly.”
“Meanwhile, the midstream and downstream business of the Company seized the market opportunity and strengthened structural adjustment and optimisation. The profitability of the Company has showed a year-on year improvement,” Sinopec said, noting that the 50-percent expected jump in H1 profit was just a preliminary calculation and investors should look for the official figures when they are released in August.
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Under the Chinese Accounting Standards for Business Enterprises (ASBE), Sinopec expects its net profit attributable to shareholders in H1 to have soared by some 50 percent compared to the US$3.988 billion (27.092 billion yuan) it posted for the first half of 2017.
According to Reuters calculations based on that assumption, this year’s first-half net profit of Sinopec would be US$5.984 billion (40.65 billion yuan), while the second-quarter net profit would stand at US$3.224 billion (21.9 billion yuan)—the highest quarterly net income since the third quarter of 2013.
In the first half of 2017, Sinopec’s profit attributable to owners of the company and prepared under the International Financial Reporting Standards (IFRS), came in at US$4.109 billion (27.915 billion yuan), a 40.1-percent surge year-on-year.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.