China's largest oil refiner China Petroleum & Chemical Corp., (SNP, SNP.L), popularly known as Sinopec, on Sunday reported a 13 percent decline in profit for fiscal 2012 despite higher revenues.
In addition, the company said it agreed to form a joint venture that will acquire $3 billion worth of overseas oil and gas assets from its state-owned parent company China Petrochemical Corp., or Sinopec Group, as part of efforts to boost its profitability.
In accordance with the International Financial Reporting Standards or IFRS, Sinopec's fiscal 2012 net profit declined to RMB63.88 billion or RMB0.708 per share from RMB73.23 billion or RMB0.812 per share in the prior year. Operating profit for the year was RMB98.66 billion, down from RMB105.53 billion last year.
Turnover, other operating revenues and other income for the year increased 11 percent to RMB2,786.05 billion from RMB2,505.68 billion in the previous year.
Exploration and Production segment revenues increased 6 percent from the prior year to RMB257.19 billion, mainly attributable to the increased sales volume of crude oil and natural gas.
Refining segment revenues grew 5 percent to RMB1,270.91 billion reflecting increased sales volumes and higher products prices. Marketing and distribution business revenues rose 9 percent to RMB1,471.88 billion.
Meanwhile, chemicals business revenues declined 2 percent to RMB411.96 billion due to continuing low demand for chemical products as a result of the macroeconomic downturn that led to a major drop in chemical product prices.
Sinopec's crude oil production rose 2 percent year-on-year to 328.28 million barrels, while natural gas production grew 16 percent to 598.01 billion cubic feet. During the quarter, the company officially launched its first shale gas pilot project with production capacity in Fuling.
Sinopec's board of directors proposed a final cash dividend of RMB0.2 per share. Combined with the interim dividend of RMB0.10 per share, the total annual cash dividend for 2012 is RMB0.30 per share, with the dividend payout ratio reaching 41 percent.
In addition, the board proposed 2 bonus shares from retained earnings plus 1 bonus share from capital reserve for every 10 existing shares to all shareholders.
Sinopec said its board of directors passed a resolution to form a 50:50 joint venture company with its parent company China Petroleum Corp. or Sinopec Group.
The joint venture will use its own funds and loans to acquire the equity interests of a number of overseas oil and gas assets owned by parent company Sinopec Group for about $3 billion, of which Sinopec will be responsible for about $1.5 billion as a 50 percent joint venture partner. The acquired assets represents 310 million barrels of proved and probable reserves.
Upon completion of the transactions, Sinopec's crude proved reserves and production are expected to increase 9 percent and 11.2 percent, respectively, to 3.1 billion barrels and 365 million barrels. The company noted that these transactions will enhance the potential of its earnings as well as profitability of its upstream business and also strengthen its resource reserves.
Looking ahead to 2013, Sinopec plans to produce 46.43 million tonnes of crude oil and 18.1 billion cubic meters of natural gas.
SNP closed Friday's trading at $113.55, up $1.91 or 1.71 percent on a volume of 53,674 shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.