The Chinese oil company Sinopec has announced a 2016 operating income of CYU 1,930bn (US$280bn), which is 4.4% less than in 2015. Due to oil prices, the upstream segment results decreased by 16.4% but the strong performances in refining and chemicals offset this figure.
The company reported an operating profit of CYU77.2bn (US$11.2bn) which is an increase of 35.9% compared to last year while the net profit attributable to shareholders reached CYU46.7bn in 2016 (US$6.8bn), thus increasing by 43.6%.
This is Sinopec's first annual profit rise in three years. This figure is mainly driven by the company's downstream business and China's growing fuel and chemicals demand, which helped to offset the low oil price environment. In 2016, low prices forced the company to close its costly wells, cutting crude oil production by 13% to 303.5 mboe, while gas production rose by 4.3%. Refinery throughput dipped by 0.4% to 235.5 Mt (around 4.71 mb/d). Total fuel sales grew by 2.9%. Sinopec expects its refinery throughput to reach 240 Mt (+1.9%) and its oil product production to reach 150 Mt.
Sinopec also announced in December 2016 it plans to submit an IPO of its retail business which could raise as much as US$10bn. In the future, the company expects to benefit from the domestic fuel demand growth (notably gasoline) and forecasts an increase in Q1 2017. In 2017, capital expenditure should rise by 44% to Cyu 110.2bn (US$16bn).
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