China's Sinopec flips to quarterly profit on robust refining business

·2 min read
FILE PHOTO: The company logo of China’s Sinopec Corp is displayed at a news conference in Hong Kong
FILE PHOTO: The company logo of China’s Sinopec Corp is displayed at a news conference in Hong Kong

BEIJING/SINGAPORE (Reuters) - Top Asian oil refiner Sinopec Corp swung to a record quarterly profit in July-September, a company filing showed on Wednesday, thanks to a robust refining business and earnings from the spin-off of pipeline assets.

The firm posted net income of 46.39 billion yuan ($6.92 billion) during the three months, nearly quadruple the level a year earlier, Sinopec said in a filing to the Shanghai Stock Exchange, after losses in the first two quarters of the year.

That's the highest quarterly profit according to Refinitiv Eikon data going back to 2003.

"The company seized the opportunity of domestic demand recovery and reversed the unfavourable situation brought by the coronavirus pandemic and low oil prices," Sinopec said.

Revenues from transferring its vast oil and gas pipeline assets to the country's newly formed energy infrastructure giant PipeChina also helped lift earnings, the company said.

With the launch of a 200,000 barrel-per-day refinery in the southern Chinese city Zhanjiang and the buying frenzy of cheap oil, Sinopec's refinery crude throughput rose nearly 2% year on year to 63.5 million tonnes in July-September.

Domestic fuel sales were 45.44 million tonnes over the period, up 0.4% from the previous quarter.

In the first nine months of 2020, net profit was down 45.7% year on year at 23.51 billion yuan under Chinese accounting standards. Weighed by weaker oil prices, revenue fell 30.4% to 1.55 trillion yuan.

Sinopec had churned out a total of 210.65 million barrels of crude oil as of the end of September, down 1% year on year, and 772.14 billion cubic feet of natural gas, 0.2% lower from a year earlier.

($1 = 6.7029 Chinese yuan renminbi)

(Reporting by Muyu Xu in Beijing and Chen Aizhu in Singapore; Editing by Mark Potter)