HONG KONG - Sinopec, Asia's top oil refiner, said its net profit rose 15 per cent in the third quarter, in line with expectations, due to strong refining margins that offset higher crude prices.
Sinopec's improving refining margins in the third quarter reflect a turnaround for the company, which has grappled with low state-set fuel prices that have failed to keep pace with the rising price of crude since the fourth quarter of 2009.
Analysts say Tuesday's fuel price hike in China indicates that Beijing is committed to a more market-based pricing mechanism even amid inflationary pressures and is a signal that the worst is over for Sinopec.
"In the first three quarters of 2010, China's economy continued to grow rapidly, domestic oil product demand and chemical product demand increased steadily," Sinopec said in a statement to the Hong Kong stock exchange.
Beijing, which raised retail fuel prices by about three per cent from Tuesday in its first hike in seven months, has traditionally been slow to raise pump prices, as leaders worry about driving inflation.
That has been especially tricky for Sinopec, which has the largest sales and distribution network for refined products in China, but has to buy more than 70 per cent of its crude on the world market.
Fuel price cuts
In the third quarter of last year, state-owned Sinopec and PetroChina felt the pinch after Beijing cut gasoline and diesel prices twice, forcing them to sell fuel at prices below production costs.
Sinopec's net profit totalled 19.64 billion yuan ($US2.9 billion) for July-September, compared with a restated 17.12 billion yuan last year, it said in a filing to the Hong Kong stock exchange on Thursday.
Three analysts surveyed by Reuters had expected a profit of 17.9 billion yuan.
Sinopec's positive results echo those of PetroChina, which reported its best quarterly earnings in two years, boosted by higher prices and putting it on track to beat full-year expectations.
From January to September, Sinopec's crude throughput rose 14.41 per cent, while its total domestic sales volume of refined products rose 16.5 per cent.
Shares in Sinopec rose 0.7 per cent on Thursday, compared with a 0.2 per cent rise on the benchmark Hang Seng Index.
Sinopec has risen 7.5 per cent so far this year, outperforming PetroChina, which has gained 2.3 per cent, but trailing CNOOC, which has risen 23.2 per cent.
Sinopec's improving refining margins in the third quarter reflect a turnaround for the company, which has grappled with low state-set fuel prices that have failed to keep pace with the rising price of crude since the fourth quarter of 2009.
Analysts say Tuesday's fuel price hike in China indicates that Beijing is committed to a more market-based pricing mechanism even amid inflationary pressures and is a signal that the worst is over for Sinopec.
"In the first three quarters of 2010, China's economy continued to grow rapidly, domestic oil product demand and chemical product demand increased steadily," Sinopec said in a statement to the Hong Kong stock exchange.
Beijing, which raised retail fuel prices by about three per cent from Tuesday in its first hike in seven months, has traditionally been slow to raise pump prices, as leaders worry about driving inflation.
That has been especially tricky for Sinopec, which has the largest sales and distribution network for refined products in China, but has to buy more than 70 per cent of its crude on the world market.
Fuel price cuts
In the third quarter of last year, state-owned Sinopec and PetroChina felt the pinch after Beijing cut gasoline and diesel prices twice, forcing them to sell fuel at prices below production costs.
Sinopec's net profit totalled 19.64 billion yuan ($US2.9 billion) for July-September, compared with a restated 17.12 billion yuan last year, it said in a filing to the Hong Kong stock exchange on Thursday.
Three analysts surveyed by Reuters had expected a profit of 17.9 billion yuan.
Sinopec's positive results echo those of PetroChina, which reported its best quarterly earnings in two years, boosted by higher prices and putting it on track to beat full-year expectations.
From January to September, Sinopec's crude throughput rose 14.41 per cent, while its total domestic sales volume of refined products rose 16.5 per cent.
Shares in Sinopec rose 0.7 per cent on Thursday, compared with a 0.2 per cent rise on the benchmark Hang Seng Index.
Sinopec has risen 7.5 per cent so far this year, outperforming PetroChina, which has gained 2.3 per cent, but trailing CNOOC, which has risen 23.2 per cent.
