China's two biggest energy firms, state-controlled PetroChina and Sinopec, are expecting to declare big increases in profit in the first half of this year thanks to an economic rebound from Covid-19 and strong margins for petrochemicals in particular.
PetroChina made an estimated profit of 45bn-60bn yuan ($7.3bn-9.3bn) in January-June this year after it declared a net loss of Yn30bn in the same period of 2020, the company said late yesterday. Its estimated first-half 2021 profit would also be up sharply from Yn28.4bn in January-June 2019.
Sinopec said it expects to report a net profit of Yn36.5-38.5bn in the first half of this year, up from a net loss of Yn22.9bn in January-June 2020 and a profit of Yn31.3bn in the same period in 2019. Final results from both companies are due to be released in late August.
Both firms have benefitted from an economy recovery after China was hit by Covid-19 in the first half of last year, as well as strong petrochemical margins.
PetroChina and Sinopec raised crude throughputs by 9pc to 3.31mn b/d and by 17.6pc to 5.11mn b/d respectively in January-March from a year earlier, while increasing yields of petrochemical products.
The companies were also helped by an oil price recovery, with average Ice Brent prices rising from $42/bl in the first half of last year $65/bl in the same period year. This boosted the value of the companies' crude-linked inventories and upstream assets.
Private-sector Hengli Petrochemical, which operates a 400,000 b/d refinery at Changxing in Dalian, estimated that its net profit will rise by 54pc to Yn8.5bn in the period.
