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Sinopec's Net Profit Rises
Sinopec, China's No 2 oil company, on Monday posted a three-fold rise in net profit for 2000, thanks to last year's price hikes of crude oil and cost-cutting efforts.
The profit, shooting up 306.8 per cent to 19 billion yuan (US$2.3 billion), was sightly higher than the company's earlier forecast of at least 17.1 billion yuan (US$2.1 billion) and about the top of market expectations of between US$2.1-2.3 billion.
Sinopec said its turnover and other operating revenues for the year increased 37 per cent to 328.9 billion yuan (US$39.8 billion).
Sinopec's board recommended a final dividend of 0.08 yuan (9.6 US cents) per share for the year.
Wang Jimin, president of the company, attributed the growth to the hefty domestic demand for oil and petrochemical products and its painstaking efforts in marketing and cost cutting.
Analysts said over two thirds of the profit derived from its oil production as international oil prices skyrocketed to 10-year highs for eight months last year.
The State's move to raise the domestic price of refined oil up to the international market level last June has successfully passed the high cost of refineries through to users.
"We are confident that, with our continuing efforts, and the dynamic market potential in China, we will bring stable and sustained growth in returns to our shareholders," said Wang.
Sinopec said it expects to cut costs by as much as 2.19 billion yuan (US$264.8 million) this year.
The firm also said it was proposing to issue up to 3 billion shares for an A-share listing in Shanghai this year, and net proceeds would be used to fund its purchase of Sinopec National Star, and refined products and crude oil pipelines in southern and eastern China.
The acquisition is widely seen as fuelling the oil production strength of the refining-heavy company, which controls 62 per cent of the domestic market for refined oil products.
Shares of Sinopec rose 2.61 per cent yesterday to HK$1.18 (15.1 US cents).
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