Sinopec's 2018 Profit Up 22%
Chinese state-owned Sinopec reported a 22% year-on-year increase in its 2018 net profit despite its trading unit Unipec incurring losses on crude oil hedging in the quarter that ended December 31 (4Q2018), it said January 25.
Sinopec’s net profit last year was yuan 62.39bn compared with yuan 51.12bn in 2017. Unipec lost yuan 4.65bn on crude oil hedging in 4Q, it said. Unipec is mainly engaged in crude oil and petrochemical products trading business and procurement of imported crude oil for the refineries of Sinopec Group.
“The company discovered in its regular supervision that there were unusual financial data in the hedging business of Unipec. Further investigations have indicated that the misjudgment about the global crude oil price trend and inappropriate hedging techniques applied for certain parts of hedging positions, resulted in a loss from some futures leg of the exchange hedging business for crude oil during the period of the crude oil price decline,” Sinopec said.
Sinopec’s total revenue for 2018 also rose 22% year-on-year to yuan 2.88 trillon.
Last year, the company produced 288.5mn barrels of oil, down 1.75% on 2017 while gas production rose 7.1% on year to 977bn ft3.