(Bloomberg) — Sinopec, China’s largest oil refiner, reported a slight increase in first-half profit as better performance at its upstream operations offset weakness in refining and petrochemicals.
Net profit for the first six months was 35.7 billion yuan ($5 billion), up 1.7 percent from a year earlier, according to a stock exchange statement on Sunday. Sales for the first half of the year were 1.58 trillion yuan.
The expansion of Chinese refining capacity this year has coincided with weakening demand, leading to an oversupply of oil products that has squeezed margins. The increasing adoption of electric vehicles and the growing popularity of trucks powered by liquefied natural gas are also reducing gasoline and diesel consumption.
Sinopec announced that it would pay an interim dividend of 0.146 yuan per share. Morgan Stanley upgraded the company to Equal Weight earlier this month due to sustained high earnings and structural growth in the gas sector.
According to the documents, the company produced 700.57 billion cubic feet of gas during the half year, while crude oil production was 140.53 million barrels.
The group spent 55.9 billion yuan on capital projects in the first half of the year and expects this to increase to 117 billion yuan in the second half of the year. It also plans to produce 679.5 billion cubic feet of gas and 139 million barrels of crude oil in the second half of the year.
(Updates sixth paragraph to add new details)
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