RPT-UPDATE 2-Sinopec Q2 net hits record, sees higher profits
(Repeats story that went out on Sunday night without any changes to text, but with new graphic)
*Q2 net profit 22 bln yuan vs 16.1 bln yuan estimate
*Sees Q1-Q3 results over 50 pct higher yr/yr
*Acquires 6 research institutes for 3.95 billion yuan (Adds analyst comment)
By Sui-Lee Wee
HONG KONG, Aug 23 (Reuters) - Sinopec Corp (0386.HK), the world's second-largest oil refiner after Exxon Mobil (XOM.N), posted record quarterly profits that widely exceeded expectations on higher fuel prices and falling crude oil prices, underscoring the turnaround in fortunes for China's once-struggling refiners.
Two fuel price hikes in June, which were part of China's fuel pricing reforms, largely boosted second-quarter profits.
Beijing's fuel price reform grants refiners a guaranteed profit margin if crude stays below $80 per barrel.
"The refining and marketing operating profits are massive," said David Johnson, Macquarie's head of oil and gas research. "It says that the pricing system is working even better than people thought."
"They are in a very strong position to cope in the second half, even if oil was to hit $80 a barrel. Oil would have to reach $90-$100 a barrel for them to be really hit."
The price of benchmark U.S. crude CLc1 averaged close to $60 a barrel in April-June, up from $43 in the previous quarter but less than half the levels seen a year ago. It rose nearly $1 towards $74 a barrel to settle at a 10-month high on Friday.
The results for Sinopec (600028.SS) (SNP.N) contrast sharply with western oil firms, including Exxon Mobil Corp and Royal Dutch Shell Plc (RDSa.L), which have reported weaker second-quarter profits due to depressed refining margins and falling oil prices. [ID:nLU411549]
Sinopec's second-quarter earnings are a huge turnaround for the state-owned refiner, which was forced to take losses at its refining operations for most of last year as it was squeezed between low state-capped fuel prices and soaring crude prices.
"It is anticipated that the result of (the) first three quarters of 2009 will be over 50 percent higher compared with the same period of last year," the company said in a statement.
Sinopec's net profit totalled 22.0 billion yuan ($3.22 billion) for April-June, based on a Reuters' calculation.
Five analysts surveyed by Reuters had expected profit of 16.1 billion yuan. The numbers compare to a net profit of 1.62 billion yuan in April-June last year.
(For a graphic on Sinopec's earnings and share price, click on: here)
The refiner -- which engineered China's largest overseas buyout deal with its $7.24 billion bid for Swiss oil explorer Addax Petroleum Corp. AXC.TO in June -- earned 33.25 billion yuan for the first half compared with 7.68 billion yuan the same period last year.
For a statement on Sinopec's earnings, click: here
ACQUIRES ASSETS
Sinopec said in a separate statement that it would acquire six research institutes from a subsidiary of China Petrochemical Corporation for 3.95 billion yuan to enhance its technical capabilities. Sinopec aims to process 97.1 million tonnes of crude in the second half of this year. The company, China's second-largest oil producer after PetroChina (0857.HK) (601857.SS) (PTR.N), plans to produce 21.4 million tonnes of crude oil and 4.96 billion cubic metres of natural gas in the second half.
Shares in Sinopec edged up 0.29 percent at HK$6.92 on Friday. They rose 19.2 percent in April-June, versus PetroChina's 39.2 percent rise and CNOOC's (0883.HK) (CEO.N) 25 percent gain. The benchmark Hang Seng Index .HSI rose 35 percent in the same period.
CNOOC and PetroChina report earnings on Wednesday and Friday respectively. ($1=6.831 Yuan) (Editing by Rupert Winchester)
