Sinopec says H1 net profit up 7.5 percent

Chinese oil giant Sinopec said Friday its net profit for the first half of 2014 was up 7.5 percent year-on-year, despite weakened domestic demand for oil products.

Asia's largest refiner by capacity said its net profit for the six months to June 30 was 32.54 billion yuan ($5.29 billion), up from 30.28 billion yuan from the same period last year.

However, its revenue fell 4.2 percent to 1.36 trillion yuan from 1.42 trillion yuan year-on-year, it said in a filing to the Hong Kong stock exchange where it is listed, late Friday.

Its operating profit was up 11.8 percent year-on-year at 52.27 billion yuan.

"In the first half of 2014, China's economy maintained its moderate growth while the growth rate of domestic demand for oil products slowed, with petrochemical product prices declining in the face of severe market competition," it said in the filing.

Petroleum products including refined oil products and other refined petroleum products, which makes up almost 60 percent of its turnover and other operating revenues, saw external sales revenue of 809.4 billion yuan, a decrease of 1.3 percent for the reported period compared to 2013.

Its external sales for chemical products, which accounts for 13.1 percent of its turnover, was 177.2 billion yuan, a decrease of 1.7 percent compared to the previous year.

"We expect international oil prices to fluctuate continuously at a high level during the second half of 2014," the company said.

"Domestic demand for oil products, especially for gasoline, is expected to grow rapidly," it said.

China in March of last year introduced fuel pricing mechanisms more in line with international market standards, giving more room for oil companies to set prices closer to market rates.

Sinopec was held partly responsible for a deadly pipeline explosion that killed more than 60 people in the eastern city of Qingdao in November, and caused losses of more than $100 million.