Essentials: Sinopec’s net profit for the first half of the year was 33.2 billion yuan, representing a year-on-year increase of 332.8%

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Sinopec’s net profit for the first half of the year increased by 332.8% on a year-on-year basis. China Petrochemical Corporation released its interim financial results for 2009 on the 23rd; in accordance with international accounting standards, Sinopec achieved a net profit of 33.246 billion yuan in the first half of the year, representing a 332.8% increase compared to the previous year. 　　Sinopec also expects its performance in the first three quarters of this year to increase by more than 50% on a year-on-year basis. 　　Sinopec stated that in the first half of 2008, international crude oil prices surged sharply, while domestic refined oil prices were kept under strict control; in some cases, the prices of refined oils were even lower than those of international crude oil. As a result, Sinopec’s refining business incurred huge losses due to policy-related factors ； Since 2009, reforms have been implemented in China regarding the prices of refined oil products as well as related taxes and fees, which helped to turn the losses incurred by the domestic refining industry around. Sinopec made full use of its advantages in terms of scale, costs, as well as its integrated operations and management capabilities; as a result, the refining business became an important source of profit for the company, leading to a significant increase in its performance on a year-on-year basis. 　　According to the released interim results, thanks to the **improved mechanism for setting refined oil prices, Sinopec’s refining division recorded a profit of 19.898 billion yuan in the first half of this year, whereas it incurred a loss of 46.546 billion yuan in the same period of 2008. 　　Despite the impressive growth in performance, Sinopec stated that this level of profitability is normal when compared to the same period in 2007, when the refining business did not incur huge losses due to domestic controls on refined oil prices. In accordance with international accounting standards, Sinopec achieved a net profit of 36.19 billion yuan in the first half of 2007. 　　Sinopec achieved turnover, other operating income, and other revenues of 534 billion yuan in the first half of this year, a decrease of 30.2% on a year-on-year basis. The basic net profit per share was 0.383 yuan, an increase of 0.294 yuan compared to the net profit per share of 0.089 yuan in the same period last year. 　　In accordance with Chinese corporate accounting standards, Sinopec achieved a net profit of 33.19 billion yuan in the first half of the year, a year-on-year increase of 332.6%. 　　The Sinopec Board of Directors resolved to approve the distribution of a semi-annual dividend of 0.07 yuan per share, resulting in total cash dividends of approximately 6.069 billion yuan. 　　Sinopec stated that in the first half of 2009, China implemented a package of stimulus measures to boost economic growth in order to counter the negative impacts of the international financial crisis on the world economy; as a result, the Chinese economy maintained solid growth, and demand for domestic oil and petrochemical products stopped falling and began to increase month by month. International crude oil prices have rebounded sharply after plummeting from their highs last year; domestic demand for refined oil products has stopped falling and stabilized, while demand for and prices of chemical products have been rising gradually since their lows in the fourth quarter of last year. Reforms to refined oil prices and taxes have been implemented domestically. Faced with the challenging situation at the beginning of the year, Sinopec promptly adjusted its business strategies, making full use of the advantages of its integrated upstream, midstream, and downstream operations to maintain and increase its overall business volume. All of the company’s business areas achieved results that were better than expected. 　　In the first half of the year, Sinopec’s exploration and production segment spent 19.438 billion yuan on capital expenditures, resulting in a new crude oil production capacity of 3.01 million tons per year and a new natural gas production capacity of 437 million cubic meters per year. Due to the sharp drop in crude oil prices, the operating income of the exploration and development sector in the first half of the year was 5.5 billion yuan, a 79.7% decrease compared with the same period last year. Primarily due to the decline in demand for refined oil products within the country in the first half of the year and a drop in the company’s sales volume, Sinopec’s marketing and distribution business saw its profits decline by 44.3% on a year-on-year basis, amounting to 12.5 billion yuan. Profits from the chemicals business rose significantly by 115.3% to 9.8 billion yuan. 　　Sinopec stated that in the second half of the year, **it will continue to adopt a proactive fiscal policy and a moderately loose monetary policy, further improve and implement economic stimulus packages, boost domestic demand, and the economy is expected to maintain rapid growth. It is expected that international crude oil prices in the second half of the year will be higher than the average level of the first half, with fluctuations within a narrow range. Domestic demand for refined oil products will continue to show a steady upward trend, while demand for chemical products will also experience a recovery; as a result, domestic ethylene production capacity is set to increase significantly. Sinopec will continue to make every effort to expand its market presence, strengthen the integration of production, sales, and research, enhance precise management, reduce costs and increase efficiency, and strive to achieve good operational results in order to reward its shareholders, employees, customers, and society with solid performance. Article source: Xinhua Net http://www.16ds.com/papers/4912/topics/35544