PetroChina, China’s biggest oil and gas producer, reported a sharper-than-expected 82 percent fall in first-quarter profit, due to lower international crude prices and inventory writedowns at its refining division.
Net profit declined to 6.15 billion yuan ($989 million) in the first three months from 34.2 billion a year ago, the state-run company said on Monday. The figures were calculated using international accounting standards.
The unaudited earnings compared with an average forecast of 8.01 billion yuan by four analysts surveyed by Thomson Reuters.
Last month, PetroChina reported a 67 percent slump in net profit for the fourth quarter, lagging forecasts. The company has said it will cut spending and divest more assets this year.
For the first quarter, PetroChina reported a 67 drop in its operating profits to 17.3 billion yuan as its realised crude prices declined 51.2 percent to $48.87 per barrel.
Its refining and chemical segment widened losses to 5.1 billion yuan from 2.2 billion yuan a year earlier, PetroChina said. Its retail and distribution division moved into the red, generating an operating loss of 2.6 billion yuan versus a profit of 3.3 billion yuan a year ago.
Its natural gas import business saw an improvement, with losses shrinking by nearly 5 billion yuan to 7.2 billion yuan in the first three months.
PetroChina and major domestic rival Sinopec Corp on Monday dismissed media reports their parents would merge to create a state-owned group, saying they had never received any official information about such a restructuring.
Shares in Sinopec and PetroChina surged in Shanghai and Hong Kong on Monday after state media reported that China would likely cut the number of central government-owned conglomerates to 40 through a series of mergers as Beijing pushes to overhaul the underperforming state sector.
($1 = 6.2185 Chinese yuan renminbi)