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| Sinopec Q2 profit dives on price cap |
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CHINA Petroleum & Chemical Corp, Asia's biggest oil refiner, posted an 87-percent drop in second-quarter profit.
Net income declined to 2.19 billion yuan (US$320 million) in the three months ended on June 30 from last year's 16.8 billion yuan, according to calculations made from first-half figures released yesterday. Profit in the first three quarters may fall by more than 50 percent, the company said.
China controls fuel prices to limit their impact on inflation in the world's fastest-growing major economy, curbing refiners' ability to pass on crude oil costs. Benchmark crude in New York has doubled in the second quarter from a year earlier, with prices reaching a record US$147.27 a barrel on July 11.
"The refiner likely made a refining loss of as much as 70 billion yuan in the first six months," Yin Xiaodong, an analyst with CITIC Securities Co, said by mobile phone in Beijing yesterday. "The second half should look a little better, as crude should ease and the government may further increase fuel prices."
Sinopec's HK-traded shares have retreated 36 percent this year, compared with a 27-percent decline in the city's benchmark Hang Seng Index. The stock fell 3.7 percent to HK$7.59 (97 US cents) last Thursday.
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