Sinopec’s 2022 net profit falls 6.9% as COVID curbs hit fuel, chemicals demand

SINGAPORE (Reuters) – China Petroleum & Chemical Corp, better known as Sinopec Corp, recorded a 6.9% decline in net income for 2022, as Chinese fuel demand was hit by Beijing’s COVID-19 control measures and consumption of petrochemicals also weakened.

Net profit last year amounted to 66.3 billion yuan ($9.65 billion), based on Chinese accounting standards, versus 2021’s 71.21 billion yuan, the top Asian oil refiner said in a stock market filing on Sunday.

“(For 2022) due to multiple factors, Chinese demand for natural gas, petrochemicals and refined oil products were lackluster,” Sinopec said.

China’s rigid COVID measures hammered transportation fuel consumption, as Sinopec recorded a 11% and 18.4% decline last year over 2021, in gasoline and aviation fuel sales respectively.

Sales for chemical fibres tumbled 18.1%.

The refiner reported 4% growth in sales of diesel fuel, thanks to a government policy shift towards late 2022 to boost refined fuel exports.

For 2023, the state oil and gas major plans to produce 280.23 million barrels of crude oil and 12,918 billion cubic feet of natural gas.

Crude throughput at Sinopec is expected to reach 250 million tonnes, or about 5 million barrels per day, the firm said, without giving a figure for 2022.

“Chinese overall economy is expected to recover in 2023, set to lift rapidly domestic demand for natural gas, refined fuel and chemicals,” the company said, adding that global oil prices are likely to stay elevated due to geopolitics and inventory levels.

Sinopec plans 165.8 billion yuan ($24.14 billion) for capital spending this year, down from 2022’s plan for a record 198 billion yuan spending. The firm did not provide a figure for actual expenditure in 2022.

Separately, Sinopec aims to raise up to 12 billion yuan in A-share private placement to fund five projects such as the third-phase expansion of Tianjin liquefied natural gas terminal and several fine chemicals projects in Maoming and Zhanjiang.

Sinopec also set aside 12.7 billion yuan for asset impairment in 2022.

($1 = 6.8675 Chinese yuan renminbi)

(Reporting by Chen Aizhu;Editing by Elaine Hardcastle)