Sinopec Corp's Net Profit for 9M 2018 Surges 52.7% Y-o-Y to RMB 60.1 billion
BEIJING,Oct. 30,2018 --China Petroleum & Chemical Corporation ("Sinopec Corp." or the "Company"; HKEX: 386; SSE: 600028; NYSE: SNP) today announced its unaudited results for the nine months ended 30 September 2018.
Financial Highlights:
In accordance with the International Financial Reporting Standards (IFRS),the Company's operating profit was RMB 85.865 billion,up 54.0% year-on-year; net profit attributable to equity shareholders of the Company was RMB 60.155 billion,up 52.7% year-on-year; basic earnings per share ("EPS") were RMB 0.497,up 52.7% year-on-year.
In accordance with China Accounting Standards for Business Enterprises ("ASBE"),the Company's operating income was RMB 2,072.970 billion,up 18.8% year-on-year; net profit attributable to equity shareholders of the Company was RMB 59.980 billion,up 56.3% from the same period last year; basic earnings per share ("EPS") were RMB 0.495,up 56.3% year-on-year.
The Company's financial position continued to improve during the first three quarters this year. In accordance with IFRS,its cash and cash equivalents at the end of the third quarter were RMB 172.284 billion.
Business Review:
In the first three quarters of 2018,global economy recorded slow recovery,while China's overall economy maintained stable performance and grew steadily with its gross domestic product (GDP) up by 6.7% year-on-year. International crude oil prices fluctuated with upward trend. The average Brent crude oil spot price for the period increased by 39.0% year-on-year. According to the statistics of NDRC,domestic apparent consumption of refined oil products increased by 5.4% compared with the same period last year. Gasoline consumption increased by 6.4% year-on-year,consumption growth for kerosene and diesel was 9.2% and 3.7% year-on-year,respectively. Domestic demand for natural gas remained robust with apparent consumption up by 18.0% compared with the same period last year. Domestic consumption of major chemicals maintained significant growth with consumption of ethylene equivalent up by 7.8% year on year,and gross margin of chemical products remained at a high level. During the reporting period,the Company captured market opportunities and made the product quality as its top priority. It attached great importance to efficiency,focused on improving the quality and efficiency of its operations,strengthened efforts in cost reduction,market expansion,structural adjustment,reform implementation and management reinforcement. Through these efforts,it delivered solid operating results.
Exploration and Production:
Exploration and Production: With the recovery of crude oil price,the Company pursued efficient exploration and effective production to increase proved reserves. Our continuing efforts in exploration paid off with new oil and gas discoveries in Sichuan Basin,Tarim Basin,Yin'e Basin and southern Songliao Basin. In development,we adopted a profit-oriented approach to speed up the crude oil new production. We also accelerated natural gas development by enhancing production-supply-storage-marketing system building to realise synergy along the entire value chain. In the first three quarters,oil and gas production of the Company was 335.34 million barrels of oil equivalent,of which domestic crude oil production increased by 0.2% while natural gas grew by 5.9%. The Exploration and Production Segment's operating loss narrowed by RMB 25.442 billion to RMB 1.081 billion compared with same period last year.
Exploration and Production
Unit
Fornine-month period
ended30September
Changes
(%)
2018
2017
Oilandgasproduction(Note1)
million boe
335.34
332.63
0.8
Crude oil production
million barrels
216.49
220.21
(1.7)
China
million barrels
186.50
186.09
0.2
Overseas
million barrels
29.82
34.12
(12.6)
Natural gas production
billion cubic feet
713.77
674.15
5.9
Realised crude oil price
USD/barrel
65.12
47.05
38.4
Realised natural gas price
USD/thousandcubicfeet
5.91
5.23
13.0
Note 1:Conversion: for domestic production of crude oil,1 tonne = 7.10 barrels. For overseas production of crude oil in 2017 1 tonne = 7.21 barrels,in 2018 1 tonne=7.20 barrels. For production of natural gas,1 cubic meter = 35.31 cubic feet. 1 barrel of oil equivalent=6,000 cubic feet.
Refining:
With the market-oriented approach,we optimised product mix to produce more gasoline and jet fuel,and the diesel-to-gasoline ratio further decreased. The GB VI refined oil products quality upgrading was constantly pushed forward. We allocated domestic and overseas resources as a whole and export of refined oil products was increased to help maintain high utilisation of refining facilities. Crude oil sourcing optimisation continued to lower our feedstock cost. We comprehensively optimised our production plans to ensure safe and reliable operations. The advantage of centralised marketing was given full play,and profitability of LPG,asphalt,and sulphur maintained at a high level. In the first three quarters,refinery throughput increased by 3.0% compared with the same period last year. Refined oil products production increased by 3.5%,among which gasoline up by 7.0%,kerosene up by 9.0% and diesel down by 1.8% compared with the same period last year. The Refining Segment realised an operating profit of RMB 54.680 billion,up by 24.7% compared with the same period last year.
Refining (Note 2)
Unit
For nine-month period
ended30September
Changes
(%)
2018
2017
Refinery throughput
million tonnes
182.74
177.46
3.0
Gasoline,diesel and
kerosene production
million tonnes
116.13
112.20
3.5
Gasoline
million tonnes
45.74
42.73
7.0
Diesel
million tonnes
48.62
49.50
(1.8)
Kerosene
million tonnes
21.77
19.97
9.0
Light chemical feedstock
milliontonnes
29.01
28.54
1.6
Light product yield
%
76.11
75.84
0.27
percentagepoints
Refining yield
%
94.98
94.76
0.22
percentagepoints
Note 2: Including 100% production of domestic joint ventures.
Marketing and Distribution:
Faced with the intensified marketing competition,the Company brought our advantages in integrated operation and distribution network into full play and coordinated internal and external resources. We proactively promoted precision marketing and differentiated marketing to achieve sustained growth in total domestic sales volume and retail business scale. We improved our environmental protection measures for our service station and revamped the storage and transportation facilities of refined oil products. We further promoted integration of fuel business and non-fuel business,perfected the system for self-owned brand products and accelerated the construction of integrated service stations. Our non-fuel business kept increasing rapidly. In the first three quarters,total sales volume of refined oil products was 148 million tonnes. Total domestic sales volume of refined oil products was 135 million tonnes,up by 1.3%. The operating revenues of non-fuel business reached RMB 24.250 billion,up by 13.4% compared with the same period last year. The Marketing and Distribution Segment realised an operating profit of RMB 23.389 billion,basically flat year on year.
Marketing and Distribution
Unit
For nine-month period
ended 30 September
Changes
(%)
2018
2017
Total sales volume of refined oil products
milliontonnes
147.78
150.23
(1.6)
Totaldomesticsalesofrefinedoilproducts
million tonnes
135.02
133.26
1.3
Retail
million tonnes
90.82
90.67
0.2
Direct sales & Distribution
million tonnes
44.20
42.60
3.8
Throughput per station(Note 3)
tonnes
3,953
3,935
0.5
Note 3: Throughput per station was annualised.
Unit: stations
As of 30 September
2018
As of 31 December
2017
Changesfromthe
endoflastyearto
the end of the
reporting period (%)
Total number of Sinopec-branded service stations
30,643
30,633
0.03
Number of company-operated stations
30,637
30,627
0.03
Numberofconveniencestores
26,981
25,775
4.68
Chemicals:
With the clients-oriented approach,we provided more products needed by the market through enhancing the dynamic optimisation of facilities and product chains and continued adjusting our product mix to reduce chemical feedstock cost and pressed ahead optimisation of product slate. We improved the coordination among mechanism combining production,marketing,research and application,advance new high-end products development,promotion and application. We put advantages of marketing network into full play and conducted differentiated and tailor-made measures to expand sales scale. We focused on value-added,green,and eco-friendly materials to satisfy clients' requirement on high quality. In the first three quarters,ethylene production reached 8.784 million tonnes,up by 2.9% and chemical sales volume was 64.98 million tonnes,up by 12.8% compared with the same period last year. The differential ratio of synthetic fibre reached 90.4% and ratio of specialty products of synthetic resin reached 64.0%. The Chemicals Segment realised an operating profit of RMB 23.944 billion,up by 43.1% compared with the same period last year.
Chemicals (Note 4)
Unit
For nine-month period
ended30September
Changes
(%)
2018
2017
Ethylene
thousand tonnes
8,784
8,534
2.9
Synthetic resin
thousand tonnes
12,171
11,791
3.2
Synthetic rubber
thousand tonnes
646
642
0.6
Monomers and polymers for synthetic fibre
thousand tonnes
7,100
7,061
0.6
Synthetic fibre
thousandtonnes
940
923
1.8
Note 4: Including 100% production of domestic joint ventures.
Capital Expenditure:
In the first three quarters,total capital expenditures were RMB 48.012 billion. Capital expenditures for the exploration and production segment were RMB 19.761 billion,mainly for oil and gas capacity building,Wen 23 Gas Storage Project,Erdos-Anping-Cangzhou Gas Pipeline Project,the first phase of Xinqi Pipeline Project as well as overseas projects. Capital expenditures for the refining segment were RMB 9.689 billion,mainly for the Zhongke integrated refining and chemical project,product mix optimisation of Zhenhai,Maoming and Tianjin,GB VI gasoline and diesel quality upgrading projects,and crude oil pipeline construction of Rizhao-Puyang-Luoyang as well as other Pipeline Storage & Transportation construction. Capital expenditures for the marketing and distribution segment were RMB 9.712 billion,mainly for constructing refined oil products depots,pipelines and service stations and revamping of underground oil tanks,as well as other safety and environmental protection hazard removal projects. Capital expenditures for the chemicals segment were RMB 6.304 billion,mainly for integrated refining and basic chemical projects of Zhongke,Gulei,high-efficiency and environment-friendly aromatics project in Hainan,Zhong'an United Coal Chemical project and high-end value-added projects of Zhongsha PC,Yangzi EVA and Yizheng high-performance fibre. Capital expenditures for corporate and others were RMB 2.546 billion,mainly for R&D facilities and information technology application projects.
Appendix
Principal financial data and indicators
Principal financial data and indicators prepared in accordance with China Accounting Standards for Business Enterprises (ASBE)
Units: RMB million
Items
As of 30 September
2018
As of 31 December
2017
Changes from the
end of last year to
the end of the
reporting period
(%)
Total assets
1,662,760
1,595,504
4.2
Total equity attributable to equity
shareholders of the Company
722,317
727,244
(0.7)
Items
Nine Months
Changes compare
withthesameperiod
lastyear (%)
2018
2017
Net cash flow from operating activities
137,919
111,193
24.0
Operating income
2,072,970
1,744,955
18.8
Net profit attributable to equity
shareholders of the Company
59,980
38,373
56.3
Net profit attributable to equity
shareholders of the Company
excluding extraordinary gains and losses
57,150
36,718
55.6
Weighted average return on net assets (%)
8.28
5.37
2.91
percentagepoints
Basic earnings per share (RMB)
0.495
0.317
56.3
Diluted earnings per share (RMB)
0.495
0.317
56.3
Extraordinary (gain)/loss items
Third Quarter 2018
RMB million
Nine Months 2018
RMB million
Net loss/(gain) on disposal of non-current assets
143
(75)
Donations
27
84
Government grants
(1,709)
(3,742)
Gains on holding and disposal of various investments
(525)
(993)
Other extraordinary income and expenses,net
549
763
Subtotal
(1,515)
(3,963)
Tax effect
338
994
Total
(1,177)
(2,969)
Equity shareholders of the Company
(1,021)
(2,830)
Minority interests
(156)
(139)
Principal financial data and indicators prepared in accordance with International Financial Reporting standards (IFRS)
Units: RMB million
As of 30 September
2018
As of 31 December
2017
Changes from the
endoflastyearto
the end of the
reportingperiod(%)
Total assets
1,504
4.2
Equityattributabletoequity
shareholdersoftheCompany
721,261
726,120
(0.7)
Nine Months
Changescompare
withthesame
periodlastyear(%)
2018
2017
Operating profit
85,865
55,757
54.0
Net profit attributable to equity
shareholders of the Company
60,155
39,404
52.7
Basic earnings per share (RMB)
0.497
0.325
52.7
Diluted earnings per share (RMB)
0.497
0.325
52.7
Return on net assets (%)
8.34
5.51
2.83
percentagepoints
Net cash generated from
operating activities
137,193
24.0
About Sinopec Corp.
Sinopec Corp. is one of the largest integrated energy and chemical companies in China. Its principal operations include the exploration and production,pipeline transportation and sale of petroleum and natural gas; the sale,storage and transportation of petroleum products,petrochemical products,coal chemical products,synthetic fibre and other chemical products; the import and export,including an import and export agency business,of petroleum,natural gas,petroleum products,petrochemical and chemical products,and other commodities and technologies; and research,development and application of technologies and information.
Sinopec Corp. sets 'fueling beautiful life' as its corporate mission,puts 'people,responsibility,integrity,precision,innovation and win-win' as its corporate core values,pursues strategies of value-orientation,innovation-driven development,integrated resource allocation,open cooperation,and green and low-carbon growth,and strives to achieve its corporate vision of building a world-leading energy and chemical company with solid and healthy foundation.
Disclaimer
This press release includes "forward-looking statements". All statements,other than statements of historical facts that address activities,events or developments that Sinopec Corp. expects or anticipates will or may occur in the future (including but not limited to projections,targets,reserve volume,other estimates and business plans) are forward-looking statements. Sinopec Corp.'s actual results or developments may differ materially from those indicated by these forward-looking statements as a result of various factors and uncertainties,including but not limited to the price fluctuation,possible changes in actual demand,foreign exchange rate,results of oil exploration,estimates of oil and gas reserves,market shares,competition,environmental risks,possible changes to laws,finance and regulations,conditions of the global economy and financial markets,political risks,possible delay of projects,government approval of projects,cost estimates and other factors beyond Sinopec Corp.'s control. In addition,Sinopec Corp. makes the forward-looking statements referred to herein as of today and undertakes no obligation to update these statements.
Investor Inquiries:
Media Inquiries
Beijing
Tel: (86 10) 5996 0028
Tel: (86 10) 5996 0028
Fax: (86 10) 5996 0386
Fax: (8610) 5996 0386
Email: ir@sinopec.com
Email: ir@sinopec.com
Hong Kong
Tel: (852) 2824 2638
Tel: (852) 2522 1838
Fax: (852) 2824 3669
Fax: (852) 2521 9955
Email: ir@sinopechk.com
Email: sinopec@prchina.com.hk
