PetroChina's profit soars by a whopping 2,290%

China's biggest oil producer PetroChina said a pick-up in oil prices helped net profit skyrocket more than 2,000 per cent in the first half, and that it was giving the entire windfall to shareholders via a cash dividend.

Net profit from January to June hit 12.67 billion yuan ($1.9 billion), rebounding from just 531 million yuan in the same period last year, the firm said in a statement to the Hong Kong stock exchange where it is listed.

That marks a rise of 2,290 per cent over the year-earlier period, which was the company's lowest half-year earnings figure since it first went public in 2000, blamed largely on weak international crude oil prices at the time.

"Supply and demand in the global oil market were progressively moving towards a state of balance," PetroChina said. "The international oil prices fluctuated significantly with the price increasing substantially as compared with the same period of last year."

Prices have since firmed up but remain half of what they were before a 2014 plunge fuelled by a supply glut, overproduction and a weak global economy.

PetroChina said an amount equivalent to the first-half profit would be given to shareholders "in overall consideration of the good fundamentals of development, financial conditions and cash flow, [and] to improve returns for the shareholders". The move follows similar recent payouts by state-owned enterprises such as China Mobile, seen by analysts as a way to lure investors and possibly shift some cash back to state coffers at a time when the government is seeking to stop capital flight. PetroChina is 86 per cent owned by its unlisted and government-controlled parent, China National Petroleum Corp (CNPC).

"The generous dividend payout was a gesture to please shareholders in a subdued oil market," Tian Miao, an analyst at Sun Hung Kai Financial, told Bloomberg News.

"CNPC will pocket a nice payment as well. PetroChina's growth will continue into the second half of the year as it finds a way to keep cutting operation costs."

Moderate gains in the world economy and "good momentum for growth" in China's economy have helped oil PetroChina's profit recovery, the company's earnings statement said.

Source: Khaleej Times