SHANGHAI: Chinese energy giant PetroChina said its net profit plunged 82 percent year-on-year in the first three months of the year, blaming the fall on international oil prices.
Net profit came in at 6.15 billion yuan ($1.01 billion) in the first quarter, down from 34.25 billion yuan for the same period in 2014, the company said late Monday in a statement to the Hong Kong stock exchange, where it is listed.
“In the first quarter of 2015, the world economy recovered slowly and geopolitics continued to be turbulent,” the company said, adding China’s economic growth slowed for the period.
China’s economy expanded 7.0 percent year-on-year in the first three months of 2015, the worst showing for a single quarter since the first three months of 2009. It expanded 7.4 percent for all of last year, the slowest pace in nearly a quarter of a century.
“International crude oil prices have significantly declined since the second half of 2014 and fluctuated at a low level in the first quarter of 2015,” PetroChina chairman Zhou Jiping said in the statement.
The price of a barrel of oil has almost halved since June owing to a surge in supplies and a slump in demand.
Turnover of PetroChina slumped 22.4 percent year-on-year to 410.34 billion yuan in the first quarter, according to the statement.
PetroChina, the listed arm of China National Petroleum Corp. (CNPC), issued a warning for first half earnings, saying the company expects its net profit to decrease substantially if oil prices remain low.
On Tuesday afternoon, shares in the firm were down 5.45 percent in Hong Kong and 1.77 percent lower in Shanghai, where it is also listed.
Separately, PetroChina has denied the Chinese government is working on forming an oil giant by merging its parent CNPC with another oil firm, Sinopec, according to a statement.
The official Xinhua news agency said Monday that China is considering merging scores of its biggest state-owned enterprises to create around 40 national champions from the existing 112 through mergers and acquisitions.
Media reports about the possible move sent the stock prices of PetroChina and Sinopec up sharply on Monday.