(Yicai Global) Aug. 25 -- The net profit of PetroChina Company Limited, China's largest oil and gas producer [SHA:601857], plunged 97.9 percent to CNY531 million (USD79.6 million), due to falling prices of crude oil, natural gas and refined oil products, according to its first-half results.
Despite the profit slump, the company's board still decided to pay cash dividends of CNY0.02131 per share to all shareholders. The total dividend payout will be CNY3.89 billion, a figure based on the company's share capital of 183,021 million shares as of June 30, 2016.
PetroChina said that in the first half, international oil and gas prices declined further, while domestic demand for refined oil was weak, and market competition intensified. The company's crude oil and natural gas prices fell 36.5 percent and 24.5 percent, respectively from a year ago, leaving the company in its most difficult period since its listing, in terms of both production and operations. Its revenue came in at CNY73.9 billion in the six months through June, down 15.8 percent from a year ago.
However, an analysis of the quarterly data shows that PetroChina's profit increased substantially in the second quarter of this year. Exploration and production have long been the company's pillar businesses. That segment suffered an operating loss of CNY20.2 billion in the first quarter but lost just CNY2.4 billion in the first half. PetroChina earned about CNY17.8 billion in exploration and production alone in the second quarter.
Profit at the company's oil-refining and chemical segment was CNY14.6 billion in the first quarter and reached CNY27.4 billion in the first half, generating over CNY12 billion in profits in the second quarter.
In the first half, the stabilizing and upward trend of international oil prices was unchanged, domestic economic downward pressure remained large and competition became increasingly fierce in the domestic market, so it will be very difficult to restore profitability in the company's oil and gas segment, with PetroChina facing very challenging market conditions, PetroChina chairman Wang Yilin said in a press release.