Sinopec Reports Weak Sales and Profit in 2019
The crude oil processor fell to 7-year lows in Hong Kong and New York.
The stock in Sinopec Shanghai Petrochemical Company Ltd. (HKEX: 0038; NYSE: SHI) was not largely impacted in early trading Thursday despite after the company announced plummeting net sales and profit for the full year 2019.
The Hong Kong-based crude oil processor said in a statement today that in the 12 months through December that revenues were $14.17 million down 7% year-over-year. Profit slipped more than 50% to $314,793 compared with $754,235 in the full year 2018.
Sinopec attributed its struggles to Beijing's' tightening of rules on the safety of petrochemicals and low oil prices. That impacted the company's operations financial health. As a result, net sales tanked to $12.45 million, representing a year-over-year decrease of 8%.
Sinopec's stock has struggled in both Hong Kong and New York, mostly on the fears of the coronavirus and weak oil prices. In New York, since it closed at $27.99 per share earlier this month, Sinopec has watched its stock fall to a 7 year low of $21.25 per share this week in New York, while also dropping to a 7 year low in Hong Kong, to HK$1.65 per share.
While Sinopec will face big challenges in 2020, the company said it will launch a "14th Five-Year Plan" in efforts to promote a refining clean-up transformation.
"To realize the business targets in 2020, the Group will improve the level of safety and environmental protection, keep smooth operation of production devices, improve system optimization, tap the potential for cost reduction and efficiency improvement, accelerate the adjustment of industrial structure, make breakthroughs in core technologies, further strengthen corporate management and advance the reform of management system," Wu Haijun, the chairman of Sinopec, said in a statement today.
In addition, Sinopec will build a R&D center to promote carbon fiber composite and industrial cultivation.