Sinopec's profit falls as high oil prices, COVID curbs weigh

China International Fair for Trade in Services (CIFTIS) in Beijing
A man takes pictures near a screen displaying a view of Sinopec's liquefied natural gas (LNG) terminal at the oil company's booth during the China International Fair for Trade in Services (CIFTIS) in Beijing, China September 1, 2022. REUTERS/Florence Lo
  • Q3 profits down 36% y/y at 13 bln yuan
  • Oil throughput rebounds in Q3, still 8% lower y/y
  • Company looks to cut 2022 CAPEX and investment in chemical sector

SINGAPORE, Oct 28 (Reuters) - Top Asian refiner Sinopec Corp's (600028.SS), net profit fell 5.6% in the first nine months of 2022, a company filing showed on Friday, dragged down by tepid domestic fuel demand and strong global oil prices.

Net income totalled 56.66 billion yuan ($7.81 billion) for the January-September period. Revenue rose 23% to 2.45 trillion yuan.

That translates into net earnings for the third quarter of 13.13 billion yuan, according to a Reuters calculation based on company filings on Friday, down from 20.67 billion yuan in the same period last year and the lowest third-quarter profit since 2019.

Sinopec's refinery crude throughput rebounded in the third quarter from the prior three months, at 59.31 million tonnes, or 4.71 million barrels per day.

However, it was still 8% lower than the same period a year earlier, as China's zero-COVID policy dampened fuel demand and an incident at Sinopec's Shanghai refinery led to a three month-long outage at the 320,000 barrels-per-day plant.

Refined oil product sales at home totalled 43.53 million tonnes, up 16% from the previous quarter and around the same level as a year earlier.

"Entering the fourth quarter, we have seen a recovery of fuel demand and we are optimistic about our sales and refining margins," said Chen Yang, deputy head of board secretary, at a conference call on Friday.

Sinopec has received 6.5 million tonnes of refined oil product exports in the recent batch of quota issuance in late September.

When asked if the company plans to fully use the quotas by end-2022, Chen said Sinopec will prioritise domestic fuel supply and optimise an export plan based on the domestic and overseas situation.

In oil and gas output, the firm produced 210.82 million barrels of crude oil in the first nine months, up 1% year on year. Its natural gas output was at 913.81 billion cubic feet, up 4%.

Company officials also said Sinopec was looking to cut total capital investment and investment in the chemical sector in 2022 due to tighter cash flow and poor performance in the chemicals business.

But a final decision is dependent on an approval from the board of directors.

Sinopec planed 198 billion yuan for 2022's capital investment, and by September it had spent 104 billion yuan.

($1 = 7.2532 Chinese yuan renminbi)

Reporting by Muyu Xu and Chen Aizhu; Editing by Susan Fenton and David Evans

Our Standards: The Thomson Reuters Trust Principles.