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August 25, 2016

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PetroChina sees net profit dive 98% in H1

NET profit of PetroChina, the country’s biggest oil producer, plunged 97.9 percent in the first half of this year, the company said yesterday, as it struggled with a weak domestic economy and low oil prices.

Net profit was 531 million yuan (US$79.8 million) in the first six months, down drastically from 25.4 billion yuan it made in the same period last year, Hong Kong-listed PetroChina said in a statement to the stock exchange.

The figure was its lowest half-year net profit since it listed in 2000, Bloomberg News reported.

“Due to the combined effects of the slow recovery of the global economy and geopolitical factors, international crude oil prices reached the bottom and began to move up in an unsteady way,” PetroChina said in the earnings report.

At the same time, China’s economic growth slowed to 6.7 percent in the first quarter, its weakest quarterly expansion in seven years.

“Low crude price is a killer for companies like PetroChina as they pretty much rely on oil income to make a living,” Tian Miao, a Beijing-based analyst at North Square Blue Oak, told Bloomberg News.

“The performance is not unexpected and what they do in the second half hinges on whether oil can really rebound.”

Earlier this year PetroChina posted its first quarterly loss since listing of 13.79 billion yuan in January to March.

The company warned of tougher conditions in the second half.

Financial markets “will tend to be unstable due to significant political events including Brexit,” it said.


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