China’s Sinopec 2022 net profit falls 8.1% on weak demand, high cost

Fanny Zhang


SINGAPORE (ICIS)–China’s biggest refiner Sinopec posted an 8.1% decrease in 2022 net profit as tepid demand and strong crude squeezed its margins.

In million yuan (CNY) 2022 2021 % change
Income 3,318,168 2,740,884 21.1%
Operating expenses -3,242,333 -2,646,256 22.5%
Operating profit 75,835 94,628 -19.9%
Profit attributable to shareholders 66,153 71,975 -8.1%

– Domestic demand in China for natural gas, petrochemicals and fuel weakened in 2022, partly of global economic weakness, Sinopec said on Sunday.
– Chemical margins slumped amid soft demand and increased feedstock prices. The chemical segment reported an operating loss of CNY14.1bn, reversing the CNY11.1bn profit generated in 2021.
– Refining margin declined by 64.7% to CNY344/tonne, mainly due to lower domestic gasoline and diesel processing margins because of high crude prices and freight cost.

– Sinopec expects demand to improve this year as the Chinese economy recovers.
– Its 2023 crude output is expected to slip, but gas, fuel and ethylene output will all post increases.
– Sinopec’s planned capital expenditure (capex) for 2023 will be CNY165.8bn, down 12.3% from 2022.

Output 2023 target 2022   Change
Crude (million barrels) 280.23 280.86 -0.2%
Natural gas production (billion cubic feet) 1291.8 1248.75 3.4%
Refinery throughput (million tonnes) 250 242.27 3.2%
Gasoline, diesel and kerosene (million tonnes) 146 140.15 4.2%
Ethylene (million tonnes) 14 13.44 4.2%

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