Sinopec announces FY 2014 results
China’s Oil major Sinopec (ticker: SNP) released its full-year 2014 results over the weekend, showing lower revenues despite continued growth in production. According to the company’s release, this was due to the dramatic fall in oil prices seen in the second half of 2014.
In accordance with the International Financial Reporting Standards (IFRS) 2014, the company’s turnover, other operating revenues and other income was $454.9 billion, down 1.9% year-over-year. Operating profit was $11.8 billion, down 24.1% from 2013, while profit attributable to equity shareholders of the company was $7.5 billion, down 29.7% year-over-year.
SNP’s considerably lower profits come in spite of the fact that the company increased its oil and gas production 8.44% in 2014 to 480.2 MMBOE from 442.8 MMBOE in 2013. While about 86% of the crude production reported by the company came from operations in China, the company only saw a 0.01% increase in production in 2014 from levels in the previous year. Sinopec’s overseas crude production meanwhile grew 129.8% to 49.9 MMBO from 21.7 MMBO in 2013.
Other Chinese majors expected to post losses
Low oil prices are expected to have a similar effect on other Chinese oil majors, including PetroChina (ticker: PTR) and Chinese National Offshore Oil Corporation (CNOOC), reports South China Morning Post.
PetroChina, the country’s largest oil and gas producer, is expected to report a net profit of $18.2 billion for 2014, down 12.6% from 2013, according to the average forecast of analysts polled by Thomson Reuters. The company’s 2015 net profit is expected to drop an additional 37% to $11.5 billion, before rebounding to $17.7 billion next year on oil price volatility.
Analysts also expect CNOOC, the country’s largest offshore producer, to post lower net profits, with the average expectation of $8.4 billion, 7.3% lower than in 2013. The analysts hold a similar forecast for the offshore company as they do for PetroChina, expecting profits to fall 49% to $4.2 billion this year before rebounding to $6.3 billion next year, again due to oil prices.
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