Breaking News

Sinopec Offers Record Dividend as Fuels Power Profit Higher

Stock MarketsMar 26, 2018 04:08
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Bloomberg. Signage for a China Petroleum & Chemical Corp. (Sinopec) gas station stands illuminated at dusk in Hong Kong, China, on Tuesday, Aug. 22, 2017. Sinopec is scheduled to report second-quarter results on Aug. 25.

(Bloomberg) -- China Petroleum & Chemical Corp., the world’s biggest refiner, will pay a record-high dividend as its massive fuels and chemical segments helped boost annual profit about 10 percent.

Net income climbed to 51.1 billion yuan ($8.1 billion), the company known as Sinopec said in a statement to the Hong Kong stock exchange Sunday. The company proposed a 0.5 yuan per share total dividend payout for 2017, the most since its listing in 2000 and above a forecast for 0.17 yuan in data compiled by Bloomberg. The company also flagged about 22 billion yuan in impairments, mostly in its upstream assets.

Sinopec’s refining and chemicals divisions have continued to support its earnings, with margins from turning crude into fuels rising 7 percent and the company reported selling greater volumes of higher value-added products.

“The strong result was driven by better profitability in refining and chemicals divisions,” analysts at Goldman Sachs Group Inc (NYSE:GS). including Mark Wiseman wrote in a research note. The dividend payout was “the major positive surprise.”

To read more about analyst reaction to Sinopec’s earnings, click here.

Shares rose as much as 3.6 percent to HK$6.83 before paring gains to 2.1 percent as of 10:32 a.m. Hong Kong time. The city’s benchmark Hang Seng Index lost 0.2 percent.

Gas Shift

The company has been shifting its upstream focus toward producing more natural gas, seeking to support President Xi Jinping’s drive of using more of the fuel instead of coal. Total output gained 3.4 percent to 446 million barrels of oil equivalent last year, it said in January, with gas rising 19 percent while crude slid 3.3 percent. It forecasts crude production will drop for a fourth year in 2018 and gas will rise further.

Sinopec’s profit missed a 53.6 billion yuan median estimate from 18 analysts surveyed by Bloomberg. Revenue rose 22 percent to 2.36 trillion yuan.

The company’s Hong Kong statement identified writedowns in its exploration and production segment of almost 13.6 billion yuan, citing a reduction in oil and gas reserves and high operating and development costs at some fields. Impairment losses in chemicals and refining were 4.92 billion yuan and 1.9 billion yuan, respectively.

While the company reported a narrower loss on E&P using Chinese accounting standards, they widened using international standards, which the company said in a Hong Kong filing was hit by higher liquefied natural gas procurement costs and expenses related to the restructuring of the Sichuan-to-East China Natural Gas Pipeline Co.

“It just shows how difficult it was for Sinopec to make a profit in oil and gas production, even as oil prices were edging toward $60 a barrel,” said Anna Yu, a Hong Kong-based analyst at ICBC International Research Ltd. “Refining and chemicals are the backbone of Sinopec’s assets and those sectors will continue to benefit from China’s growing fuel demand.”

Sinopec also reported Sunday:

  • Capital expenditure will rise almost 18 percent to 117 billion yuan, with about 41 percent of that going to exploration and production
  • Aims to produce 290 million barrels of crude oil, with 41 million coming from overseas, and 974.1 billion cubic feet of natural gas
  • Plans to process 239 million tons of crude oil, with total oil product sales in China reaching 179 million tons

State-owned peer PetroChina Co., the country’s biggest oil and gas producer, said Thursday full-year profit tripled to 22.8 billion yuan. Cnooc Ltd., China’s top offshore oil and gas explorer, will probably report that earnings jumped about 50-fold last year when it announces results on March 29, according to estimates in a Bloomberg survey.

(Updates throughout with details from Hong Kong statement.)

Sinopec Offers Record Dividend as Fuels Power Profit Higher

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email