China Petroleum and Chemical Corp. (00386.HK, Sinopec) has decided to delay a planned listing of its sales unit amid falling crude prices, the Hong Kong Economic Journal reported Tuesday.
Chairman Fu Chengyu said some shareholders want the business to achieve bigger revenue and scale before going ahead with the plan.
The subsidiary operates more than 30,000 oil and gas stations and about 23,000 convenient stores nationwide.
Banks, fund companies and corporate entities are among 25 investors in the sales unit, holding a combined 30 percent stake worth 105.04 billion yuan (US$16.87 billion).
The National Development and Reform Commission slashed gasoline and diesel prices 11 times from July to December last year in line with slipping global crude costs.
The price cuts reduced Sinopec’s revenue from its sales and distribution business by 41.7 percent to 10.66 billion yuan in the second half last year.
The fall was too steep to be offset by a 45 percent increase in sales in the group’s convenient store business.
The weak numbers reflect a two-month time lag in the delivery of crude, resulting in higher production costs last quarter, Fu said.
International crude prices were about US$40 per barrel at the time.
This article appeared in the Hong Kong Economic Journal on March 24.
Translation by Vey Wong
[Chinese version 中文版]
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