Sinopec saw its net profit for the first half of the year slip 19.4% to 36.1 billion yuan from a year ago and reduced the interim dividend by 9.4% to 14.5 fen.
The decline is primarily attributed to lower oil prices and weakened fuel demand due to the sluggish domestic economic recovery.
Sinopec, the world’s largest refiner by capacity, reported revenues of 1.59 trillion yuan for the first half of the year, down 1.1% from the year earlier level. Its operating profit fell by 14.7% year-on-year to 53.7 billion yuan.
During the period, Sinopec processed a total of 126.5 million tonnes of crude oil, up 4.8% from a year ago and its refined fuel sales rose 18.5% to 116.6 million tons, the company said.
Demand for diesel fuel, however remained under pressure from an ailing property sector and as weakening merchandise exports curbed trucking.
Meanwhile, crude prices were 24% lower than the year before, reducing the value of Sinopec’s global oil and gas production.
Chinese refiners overall benefited from cheap crude oil supplies from Iran, Venezuela and Russia as Western sanctions forced those producers to sell oil at deep discounts to keep revenue flowing. Although state majors have shied away from Iranian and Venezuelan oil, Sinopec has been taking in Russian supplies, traders have said.
The company said in a separate stock exchange filing that it plans to spend 800 million yuan to 1.5 billion yuan on a share buyback on the A-share market. It declared an interim dividend of 14.5 fens a share compared with 16 fens a year earlier.