Sinopec's profit for Jan-Sept is down by a third due to lower oil prices and weaker fuel sales

Sinopec, a Chinese oil company, reported a 32% drop in its net income year-on-year for the first three months of this year due to lower crude prices and weaker sales.

Sinopec, the world's biggest refiner by volume, reported a net profit of 8.5 billion yuan (1.19 billion dollars) in its third quarter, which was almost flat compared to a year ago, according to Chinese accounting standards. Sinopec reported in a filing that the net income for the first 9 months was 29.98 yuan (about $4.21 billion).

Sinopec has processed about 4,98 million barrels of crude oil per day between January and September. This is a 2.2% decrease from the year before.

In the same period, sales of refined fuels dropped 5.7% on an annual basis to 171.4 millions tons. Domestic sales accounted for 133.1 million tonnes, a 3.6% decline.

Sinopec reported that as oil prices and fuel sales declined, the company "optimized plant utilization" to maximize output of profitable products.

The department's refining division made 7 billion yuan in profit, before taxes and interest.

Sinopec's crude oil production fell by 0.1% in the first quarter of the year to 211.2 million barrels. Natural gas output increased 4.9%, reaching 1,099.3 trillion cubic feet.

Capital expenditures for the first nine-month period reached 71.6 billion Yuan, down from 86.35 billion the year before. Nearly 60% of this amount was spent on exploration and project development, such as Jiyang oilfield in northwest China and Tahe shale in east China.

Chemicals segment posted a loss of 8.2 billion yuan before taxes and interest during the nine-month time period, despite an impressive 15.4% increase in ethylene production, due to "continued capacity release" as well as "persistently low margins."

Sinopec shares listed in Hong Kong have fallen 5.2% over the past year, falling short of the Hang Seng Index which has increased 31.3%.

(source: Reuters)