Sinopec’s full-year revenue tumbled 16% amid sluggish demand, with China’s oil consumption seemingly nearing a peak.
The nation’s greatest refiner noticed internet earnings fall to 49 billion yuan ($6.8 billion) in 2024 from 58.3 billion yuan a yr earlier, in keeping with a submitting on Sunday, citing worldwide reporting requirements. That in contrast with analysts’ expectations for a revenue of 56.4 billion yuan.
The droop displays the corporate’s operational challenges, with nationwide oil utilization falling final yr. The federal government is pushing refiners to supply much less gasoline and extra petrochemicals, because the electric-vehicle growth weighs on consumption of diesel and gasoline. Highway fuels demand is predicted to maintain declining this yr, in keeping with the Worldwide Vitality Company.
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The working revenue for Sinopec’s refining enterprise dropped 67% to six.71 billion yuan.
World oil costs averaged about 3% much less in 2024 than the earlier yr, with Brent extending declines this quarter as US President Donald Trump pushes his commerce conflict and encourages increased manufacturing. Whereas the drop has lowered some prices for Chinese language refiners, the contraction within the nation’s property sector, an importer driver of demand, has discouraged processors from elevating working charges.
Sinopec mentioned it plans to chop its annual funds to 164.3 billion yuan this yr, from 175 billion yuan in 2024. Because the second-biggest Chinese language producer, it goals to boost output by 1.3% to 522 million barrels of oil equal. And it’ll reduce gross sales of refined merchandise by 2.7% to mitigate demand weak spot, whereas holding capability unchanged.
In the meantime, the working loss on the chemical substances enterprise elevated by 66% from a yr earlier to 10 billion yuan. Nonetheless, Vice President Huang Wensheng advised a briefing in Hong Kong on Monday that Sinopec expects Chinese language petrochemicals demand to develop by about 3% a yr by way of 2030, which is able to assist the corporate’s program of changing outdated amenities with new mega complexes.
China goals to take care of nationwide oil output at about 200 million tons a yr, whereas boosting gasoline provides to boost vitality safety, in keeping with a authorities plan. Nonetheless, the refining sector is predicted to face extended overcapacity, resulting in the phase-out of smaller, unprofitable processors and gas-filling stations.
Fuel output in 2024 rose 4.7%, outpacing progress in oil manufacturing of 0.3%, Chief Monetary Officer Shou Donghua mentioned on the Hong Kong briefing. Shou additionally mentioned Sinopec’s liquefied pure gasoline enterprise noticed file earnings final yr.
China has imposed a 15% levy on US LNG in response to blanket American tariffs on Chinese language exports. Sinopec has a long-term contract with US provider Enterprise World Inc. starting subsequent yr. “We are going to see if we have now to maneuver the cargoes elsewhere, relying on the US tariffs,” Vice Chairman Zhao Dong advised the briefing.
Sinopec’s friends Cnooc Ltd. and PetroChina Co. will report earnings on March 27 and March 30 respectively.
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