UpdateSinopec's 2010 profit up 13.7% on demand, price increase

28 March 2011 08:21  [Source: ICIS news]

Sinopec

(adds details, analysts comments)

GUANGZHOU (ICIS)--Sinopec's 13.7% increase in its net profit for 2010 to yuan (CNY) 71.8bn ($10.8bn) on rising product demand and prices, and expansion of its operations, is in line with market expectations, analysts said on Monday.

The company's total revenue increased 42.2% year on year to CNY1,913bn, while operating profits rose 15.8% to CNY105.0bn in 2010, the China's energy giant said in a statement on Sunday.

Three of its four business segments registered an increase in operating profit, with the refining segment as the only exception, as spikes in crude prices exceeded that of refined products.

Analysts said an increase in profit was narrowed by a decline in the refining segment, which saw operating profits down mainly because of lower margins. The margins may grow if the government raises petroleum product prices, they added.

On the other hand, its chemical segment’s profits were better than expected, Zheng Zhiguo, an analyst from Shanghai-based Shengyin Wanguo Securites, told ICIS.

The company's upstream exploration and production segment recorded an operating profit of CNY47.15bn for 2010, a hefty year-on-year increase of 97.3%.

Sinopec produced 328m barrels of crude oil last year, flat when compared with 2009, while production of natural gas rose 47.6% year on year to 441.4bn cubic feet in 2010.

The average transacted selling price of crude oil and natural gas was CNY3,406/tonne and CNY1,174 per thousand cbm, respectively, representing year-on-year increases of 38.2% and 22.4%.

Its chemical segment posted an operating profit of CNY15.0bn for 2010, a gain of 8.9% year on year. Ethylene production reached 9.1m tonnes in the year, up by 34.9% from 2009.

Operating profit for the marketing and distribution segment increased by 1.5% over 2009 to CNY30.8bn, while the refining segment recorded an operating profit of CNY15.9bn, down by 42.4% from the year before.

The company processed 211m tonnes of crude oil in 2010, up by 13.2% from the previous year, and produced 124m tonnes of refined oil products, an increase of 9.4% year on year. Meanwhile, it sold 140m tonnes of refined oil products in the domestic market in 2010, up by 13.3% year on year.

The company's net profit is expected to rise by 13% in 2011 and by 8% in 2012, based on the assumption of oil prices at $100/bbl and $105/bbl, respectively, Zheng said.

 

Production of major chemical products (unit: thousand tonnes)


2010

2009

Change (%)

Ethylene

9,059

6,713

34.9

Synthetic resin

12,949

10,287

25.9

Synthetic rubber

967

884

9.4

Synthetic fibre monomer and polymer

8,864

7,798

13.7

Synthetic fibre

1,393

1,302

7.0

Urea

1,223

1,752

(30.2)

Source: Sinopec

Judith Wang contributed to this article

($1 = CNY6.56)

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