Sinopec pays record dividend
China Petroleum & Chemical, the world’s biggest refiner, will pay a record dividend as its massive fuel and chemical segments helped it post a nearly 10% increase in full-year profit.
Net income climbed to 51.2billion yuan ($8.1bn), the company known as Sinopec said in a statement to the Shanghai Stock Exchange on Sunday.
The company proposed a 0.5 yuan per share total dividend for 2017, the most since its Hong Kong listing in 2000 and above a forecast of 0.17 yuan in data compiled by Bloomberg.
It also flagged 22-billion yuan in impairments, mostly relating to its upstream assets.
While oil’s rally has helped Sinopec cut losses in its production and exploration segment, its refining and chemicals units have helped it ride out the volatility of oil’s earlier crash as margins from making fuels and petrochemicals improve. “It just shows how difficult it was for Sinopec to make a profit in oil and gas production, even as oil prices were edging towards $60 a barrel,” said Anna Yu, a Hong Kong-based analyst at ICBC International Research.
“Refining and chemicals are the backbone of Sinopec’s assets and those sectors will continue to benefit from China’s growing fuel demand.”
The company has shifted its upstream focus towards producing more natural gas to support President Xi Jinping’s drive of using less coal.
Sinopec’s total output gained 3.4% to 446-million barrels of oil equivalent in 2017, it said in January, with gas rising 19% while crude slid 3.3%.
It forecasts crude production will drop for a fourth year in 2018 and gas will rise.
Sinopec’s profit missed a 53.6-billion yuan median estimate from 18 analysts surveyed by Bloomberg. Revenue rose 22% to 2.36-trillion yuan.
Its share price fell on Friday 2.2% to HK$6.59 compared with the benchmark Hang Seng index’s 2.5% drop.
The company flagged writedowns in its exploration and production segment of 12.6-billion yuan, citing a reduction in oil and gas reserves and high production costs at some fields.
Impairment losses in chemicals and refining were 4.78-billion yuan and 1.84-billion yuan, respectively, according to the Shanghai statement.
PetroChina, China’s biggest oil and gas producer, said on Thursday full-year profit tripled to 22.8-billion yuan.