Sinopec Q1 Earnings & Sales Jump on Higher Oil Prices
China Petroleum and Chemical Corporation SNP or Sinopec reported first-quarter 2018 earnings per share of RMB 0.159, 12% higher than RMB 0.142 in the year-ago quarter. Moreover, revenues improved 6.7% year over year to RMB 621,251 million.
Higher oil price realizations as well as improved refinery throughput led to the solid first-quarter show.
Q1 Price Performance
During the first quarter, Sinopec underperformed the Zacks Emerging Market Integrated industry. The company's shares gained 20.6% compared with the industry's 24.1% rally.
Exploration and Production: During the three-month period ending Mar 31, 2018, Sinopec's crude oil production decreased a marginal 1% year over year to 71.35 million barrels. However, natural gas volumes rose 0.6% year over year to 239.83 billion cubic feet.
Domestic crude oil production increased 1.3% year over year to 61.43 million barrels. Overseas volumes were down 13.1% year over year to 9.92 million barrels. Total oil and gas production dropped 0.5% year over year to 111.33 million barrels of oil equivalent.
Realized oil price during the first quarter was U.S.$59.8 per barrel, up 21.8% year over year. Moreover, realized natural gas price rose 25.6% year over year to U.S.$6.28 per thousand cubic feet.
Higher oil and natural gas price realizations primarily resulted in the loss of 318 million yuan at the segment, considerably narrower than the loss of 5.8 billion yuan in the year-ago quarter.
Refining: The Refining business recorded a 2.1% year-over-year improvement in refinery throughput to 60.16 million tons. Production of petroleum products increased 2.6% from the prior-year quarter to approximately 37.98 million tons. Improvement in this front helped the business report a profit of 19 billion yuan, up from 16.8 billion yuan in the January-March quarter of 2017.
Marketing and distribution: The segment recorded a profit of 8.9 billion yuan, down from 9.2 billion yuan in the year-ago quarter.
Capital expenditures for the January¨CMarch quarter of 2018 totaled 6.4 billion yuan, higher than 2.7 billion yuan a year ago. Out of this, 1.6 billion yuan was spent on exploration and production. Sinopec put in 1.3 billion yuan in the Refining segment, while the Chemical Business segment was allocated 1.2 billion yuan. The company used 2.2 billion yuan for the Marketing and Distribution segment.