China's Sinopec Q3 profits down 35% y/y on fierce competition

Credit: REUTERS/CHINA STRINGER NETWORK

Sinopec Corp, Asia's top refiner, posted a third-quarter net profit of 11.94 billion yuan ($1.69 billion), down 35% from the same period last year, according to a Reuters calculation based on a company filing on Wednesday.

BEIJING, Oct 30 (Reuters) - Sinopec Corp 600028.SS, 0386.HK, Asia's top refiner, posted a third-quarter net profit of 11.94 billion yuan ($1.69 billion), down 35% from the same period last year, according to a Reuters calculation based on a company filing on Wednesday.

The decline follows the launch of two privately owned mega refineries and the expansion of some major refining plants, which has added to the surplus in the Chinese refined oil market and slashed profit margins in the refining industry.

Hengli Petrochemical Co 600346.SS in May launched a refinery with a crude processing capacity of 400,000 barrels-per-day (bpd) and Zhejiang Petrochemical Co completed a 200,000 bpd refining facility in southern China.

In the first nine months of 2019, Sinopec's net profit was down 27.8% at 43.28 billion yuan under Chinese accounting standards, while revenue reached 2.23 trillion yuan, up 7.7% from the year earlier period, the company said in its filing to the Shanghai Stock Exchange.

So far this year, Sinopec produced 212.78 million barrels of crude oil, down 1.6% from a year earlier, and 773.41 billion cubic feet of natural gas, up 8.4% on the year.

Capital spending in the company was 78 billion yuan in the first three quarters, mainly used in shale gas exploration in southwestern China and oilfield expansion in the northwestern part of the country, and the construction of its Zhanjiang integrated refinery in Guangdong.

($1 = 7.0555 Chinese yuan renminbi)

(Reporting by Muyu Xu and Dominique Patton, editing by Louise Heavens)

((muyu.xu@thomsonreuters.com; +86 10 56692117;))

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