Sinopec Full-Year Earnings Declinel on Impact From Covid Curbs

Sinopec earnings fell last year as Covid restrictions pinched fuel demand, while domestic output of oil and gas rose to a record level.

(Bloomberg) — Sinopec earnings fell last year as Covid restrictions pinched fuel demand, while domestic output of oil and gas rose to a record level.

China Petroleum & Chemical Corp., as it’s officially known, posted net income of 66.2 billion yuan ($9.64 billion) for 2022, according to international financial reporting standards. That compared with a near-record profit of 72 billion yuan a year earlier, the company said in an exchange filing Sunday.

Covid Zero restrictions reduced road and air traffic in China last year, hurting the performance of the firm’s leading refining and chemical units.

Meanwhile, output of oil and gas in China and overseas rose 1.9% last year, the seventh straight year of increases as Beijing seeks to reduce dependency on imported energy. Upstream production was also aided by soaring fuel prices amid a global energy crisis, with Brent crude averaging about 40% more in 2022 than the previous year.

Sinopec plans to add 165.8 billion yuan in capital expenditure this year, after it reported spending 189.1 billion yuan for 2022. The company had targeted record capital expenditures of 198 billion yuan last year.

To compensate for the increased cost of drilling and petrochemical facilities, the firm has been lobbying authorities for higher export quotas to take advantage of stronger diesel margins overseas.

(Adds details on output of gas from first paragraph.)

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