The net profit of China Petroleum & Chemical Corp. (Sinopec), the largest oil processing company in China, plunged by 30% to 46.67 trillion yuan or 0.397 yuan a share in 2014. That is the worst result since 2008.
Over a year, Sinopec's revenues declined by 1.9% to 2.83 billion yuan from 2.88 billion yuan. Oil production output increased by 8.5% to 361 million barrels but an average oil price dropped by 5.8%. Analysts expected the net profit of the oil production giant to hit the level of 53.5 billion yuan; however, the real figures turned to be better than expected.
In the Q4 of 2013, the energy giant made profit of 13.83 billion yuan. During the same period in 2014, the company logged 5.33 billion yuan of losses.
According to the annual report for the previous year, operating revenues were down 14% and reached the level of 47 billion yuan. Sinopec saw profit slip by 34% in the Q4.
Other losses were estimated at 7.26 billion yuan in 2014.
Data is expected to be weak this year too due to the fact that China’s economy is likely to enter a slow growth phase and international crude oil prices stay low. Sinopec has plans to reduce oil production by 3.6% and increase natural gas production by 24%. This year, the company is going to cut its capex costs to 135.9 billion yuan from 154.6 billion yuan in the previous year.
The market reacted negatively to the latest report and the company’s shares plunged by 3.6% to a 3-month low. The oil giant capitalization contracted 12% last year.
