Sinopec’s Net Income Dips 9.9% in 2023 Amidst ‘Complex Environment’
On March 24, China Petroleum & Chemical Corp (Sinopec), the world’s largest oil refiner by capacity, reported a 9.9% decrease in its net profit for 2023. This decline was attributed to falling oil and gas prices, although it was partly offset by a rebound in fuel demand.
According to the company’s filing to the Shanghai stock exchange, Sinopec recorded a net income of 60.5 billion yuan ($8.37 billion) under Chinese accounting standards. In a statement to Reuters, Sinopec acknowledged facing a challenging operational environment and intense competition throughout the year.
Comparatively, Sinopec’s performance in 2023 was slightly worse than the previous year, when it experienced a 6.9% decline in net income due to the impact of COVID-19 restrictions on fuel and chemicals demand. However, there was notable recovery in demand for aviation fuel and gasoline as passenger air travel increased and domestic driving activity surged in China.
The company observed a significant uptick in gasoline sales by 14.3%, diesel by 6.4%, and aviation fuel by 49.5% as part of the post-pandemic demand recovery. These figures encompass both domestic market sales and exports. Sinopec capitalized on robust export opportunities, particularly in diesel and jet fuel shipments, contributing to strong export profits.
In 2023, Sinopec achieved a record refinery throughput of 257.52 million metric tons, equivalent to approximately 5.15 million barrels per day. The company forecasts further growth in refinery throughput to reach 260 million tons in the current year.
Looking ahead, Sinopec anticipates a slight decline in crude oil production to 279.06 million barrels in 2023, compared to 280.23 million barrels in the previous year. Conversely, natural gas production is expected to increase to 1,380 billion cubic feet from 1,292 billion cubic feet. However, Sinopec noted that its petrochemical business remained sluggish, with sales of chemical fibers and plastics decreasing by 1.8%.
