Chinese refiner Sinopec says 1Q net profit up 85 pct on higher fuel prices, lower crude costs

Chinese refiner Sinopec: 1Q net profit up 85 pct

SHANGHAI — China Petroleum & Chemical Corp., Asia’s largest refiner by capacity, said Tuesday that its net profit rose 85 percent in the first quarter, helped by rising prices for oil products and lower crude oil costs.

The company, also known as Sinopec, reported a net profit of 11.2 billion yuan ($1.6 billion) in January-March, up from 6.06 billion yuan in the first quarter of 2008.

Sinopec’s net profit fell 47 percent in 2008 from a year earlier as government caps barred it from passing on costs of surging crude oil prices. But it has seen a gradual improvement in its refining sector thanks to hikes in domestic fuel prices and the decline in international crude oil prices from their peak of about $150 per barrel in July.

Pricing reforms and other policy changes have “reversed the tide of years’ losses and become an important backbone of corporate profit,” Sinopec said in a statement to the Hong Kong Stock Exchange.

The volume of crude oil processed in the first quarter fell 3.3 percent from the same period a year earlier, but rose 1.2 percent over the last quarter of 2008 — reflecting a slight recovery in demand.

The company forecast that its earnings for the first half of the year would rise by more than 50 percent from a year earlier.

“The refining segment of Sinopec Corp.’s advantages in scale and cost, and the advantages in integration and management … will be fully demonstrated,” the company said.