Sinopec's 2025 Net Profit Plunges 36.8% Amid Weak Petrochemical Margins and New Energy Shift
Sinopec reported a 36.8% decline in 2025 net profit, reaching 31.8 billion yuan, attributed to weak petrochemical margins and increasing new energy substitution. The company saw a slight dip in refinery throughput, alongside decreased petrol and diesel production and sales, despite a rise in kerosene and natural gas output. Capital expenditure for 2026 will focus on expanding crude oil and natural gas capacity, as Sinopec navigates a changing energy landscape.
China Petroleum & Chemical Corp (Sinopec) announced a significant 36.8% drop in its 2025 net profit, falling to 31.8 billion yuan (S$5.9 billion). This substantial decline was primarily driven by subdued petrochemical margins and the growing impact of new energy sources replacing traditional fuels. The world's largest oil refiner experienced a 0.8% reduction in refinery throughput, processing 250.33 million tonnes, equivalent to five million barrels per day, though it anticipates stable throughput in 2026. Key production figures showed a 2.4% decrease in petrol and a 9.1% fall in diesel output, while kerosene production bucked the trend with a 7.3% increase. The company's annual refining gross margin improved to 330 yuan per tonne, partly due to better margins from by-products such as sulphur and petroleum coke, which helped offset high crude import premiums. Sales performance mirrored production, with petrol sales down 2.5% and diesel sales falling 9.1%, both experiencing average price reductions. Kerosene sales, however, rose 4%. On the exploration and production front, Sinopec saw a modest 0.7% increase in domestic crude oil output to 255.75 million barrels in 2025, with overseas output also rising. Natural gas production grew by 4% to 1.46 trillion cubic feet, with further growth expected. Despite a 13.5% rise in ethylene production, external sales revenue from chemical products decreased by 9.6% to 378 billion yuan due to lower product prices. Sinopec's capital spending for 2025 was 147.2 billion yuan, with plans for a similar range in 2026 (131.6-148.6 billion yuan), focusing heavily on exploration and development for crude oil and natural gas capacity expansion, particularly in western and southern Sichuan. The company's shares in Hong Kong have slightly risen but have underperformed its major peers.
