Sinopec’s Third Quarter Financial Report Shows Decline in Revenue and Profit
Sinopec released its third-quarter financial report on October 29th, showing a decrease in both revenue and net profit for the first three quarters of the year. The net profit dropped by over 30%, with the refining, chemical, and marketing sectors all contracting. This highlights the plateauing consumption of refined oil products in China and the industry’s challenges due to intense internal competition.
In the third quarter of 2025, Sinopec’s operating income was 2.1134 trillion yuan, down by 10.7% compared to the same period last year. The net profit was 29.984 billion yuan, a 32.2% decrease year-on-year. In the third quarter alone, revenue dropped by 10.9%, while net profit fell by 0.5%.
Looking at the sectors individually, both refining and chemical industries, as well as marketing, experienced contractions. Sinopec’s crude oil processing volume in the first three quarters was 186.41 million tons, a 2.2% decrease year-on-year.
The marketing and distribution sector faced similar pressures, with the total sales volume of refined oil products in the first three quarters dropping by 5.7% compared to the same period last year, including a 3.7% decrease in domestic retail sales.
Not only Sinopec but also the overall production and sales of refined oil products in China contracted. According to data from the National Bureau of Statistics, monthly cumulative production of gasoline in China has been declining since February this year, with a 5.3% drop in September. Cumulative diesel production has been falling for 21 consecutive months since February 2024, with a 2.5% decline in September.
Since 2024, as the penetration rate of new energy vehicles has increased, compressing the market space for fuel vehicles, and LNG heavy truck development accelerated to replace diesel heavy trucks, a pivotal turning point has been reached for the transportation fuel sector, which accounts for over 60% of China’s oil consumption. Reports from China Petroleum and Sinopec’s think tanks indicate that the consumption of refined oil products in China decreased by 2.4% in 2024, signaling a period of reduced consumption in the industry.
Starting from October 24th, domestic gasoline and diesel prices decreased by 265 yuan and 255 yuan per ton, respectively. This year, gasoline and diesel prices have dropped by 745 yuan per ton and 715 yuan per ton, respectively, from the end of 2024. Most areas in China will see diesel prices drop to 6.6-6.7 yuan per liter, and the retail price of 92 octane gasoline will be reduced to 6.8-6.9 yuan per liter, marking an era of “6 yuan oil prices.”
Since 2024, the average operating rate of Chinese refineries has been 74.9%, a decrease of 4.0 percentage points year-on-year. The refining industry’s gross profit has decreased to 70 yuan per ton, compared to 290 yuan per ton and 360 yuan per ton in 2022 and 2023, respectively.
Reuters analyzed that despite China’s economy showing signs of recovery under continuous stimulus measures and avoiding any damage from the tariffs expected by the Trump administration in the United States, the situation regarding refined oil consumption may remain challenging.
The biggest issue for Sinopec lies in the chemical sector. The sector reported an operating loss of 8.223 billion yuan in the first three quarters, becoming a major factor dragging down the overall performance. Due to continuous releases of new chemical production capacity in China causing price depression, the quarterly loss in the chemical sector expanded from 5.6 billion yuan in the same period last year to 7.4 billion yuan in the third quarter.
A report by Guoxin Securities pointed out that the chemical industry is facing intense internal competition, leading to challenges of overproduction without increased profits. The overall industry’s operating income profit margin has decreased from 8.03% in 2021 to 4.85% in 2024, and remained low in the first half of 2025.
The exploration and development sector achieved profitability, with an operating profit of 38.085 billion yuan in the first three quarters, becoming the company’s largest profit source.
Notably, there are concerns revealed in the company’s balance sheet. Non-current liabilities due within one year surged by 64.5%, rising from 64.6 billion yuan to 106.2 billion yuan. Meanwhile, the amount of bonds payable increased from 25.6 billion yuan to 52.6 billion yuan.
Since the beginning of this year, Sinopec’s stock listed in Hong Kong has fallen by 5.2%, while the Hang Seng Index in Hong Kong has increased by 31.3%.
Sinopec’s main business includes petroleum exploration and extraction, pipeline transportation, sales, oil refining, petrochemicals, synthetic fibers, fertilizers, and other chemical production and product sales, storage, and transportation.