Sinopec's Net Profit for 2019 Q1 reached RMB15.468 Billion
BEIJING,April 30,2019 -- China Petroleum & Chemical Corporation ("Sinopec Corp." or the "Company") (HKEX: 00386; SSE: 600028; NYSE: SNP) today announced its unaudited first quarterly results for the three months ended 31 March 2019.
Financial Highlights
In accordance with the CASs,the Company's operating income for the first quarter was RMB 717.579 billion,up 15.5% year-on-year; the net profit attributable to equity shareholders of the Company was RMB 14.763 billion,down 21.3% year-on-year; the basic earnings per share were RMB 0.122,down 21.3% year-on-year.
In accordance with the IFRS,the Company's operating profit for the first quarter was RMB 24.841 billion,down 15.0% year-on-year; the net profit attributable to owners of the Company was RMB 15.468 billion,down 19.9% year-on-year; the basic earnings per share were RMB 0.128,down 19.5% year-on-year.
During the period,the Company maintained a sound financial position. In accordance with the IFRS,the Company had cash and cash equivalents of RMB100.760 billion as at 31 March 2019.
Operating Review
In the first quarter of 2019,the global economy experienced weak growth momentum while China's economy maintained stable growth with gross domestic product (GDP) up by 6.4%. International oil prices recovered from low level at the end of last year,domestic refined oil products prices were adjusted in a timely manner. Domestic demand for natural gas grew rapidly with apparent consumption up by 11%. Refined oil products market,with ample supply,witnessed strong competition. Demand for chemicals increased steadily.
Adhering to the general principle of making progress while maintaining stability and the requirements for high-quality development,we will accelerate the strategic plan of our phased goals for year 2020 through year 2050. Guided by "reform,management,innovation and development",we stick to the operating principles of "specialised development,market-based operation,international layout and overall coordination" and make great efforts in optimising operation,expanding market,reducing costs,controling risks,deepening reform and reinforcing management.
In accordance with CASs,net profit attributable to equity shareholders of the Company was RMB 14.763 billion in the first quarter,down by 21.3% over the same period of last year. In accordance with IFRS,net profit attributable to equity shareholders of the Company was RMB 15.468 billion,down by 19.9% compared with the same period of last year.
Exploration and Production:With the recovery of oil price,the Company fully implemented the action plan of redoubling efforts in oil and gas exploration and production. Measures were taken to accelerate the formation of an integrated value chain of natural gas business including production,supply,storage and marketing and continuously reduce cost and expenditure on all fronts. Tangible results were achieved in maintaining oil production and increasing gas output. In exploration,we reinforced preliminary exploration in new areas and strengthened integrated detailed evaluation in mature fields,which led to new discoveries in Jiyang Depression and Sichuan basins. In crude oil development,we made a full-fledged push to build profitable production capacity,deepen the structural adjustment of mature fields,reduce natural decline rate and ensure steady production. In natural gas development,we constantly pushed forward capacity building in Hangjinqi of Neimongol,west Sichuan Depression and Weirong gas fields. We accelerated construction of natural gas production,storage and marketing system and promoted a coordinated growth along the value chain.
In the first quarter,the oil and gas production of the Company was 113.46 million barrels of oil equivalent,up by 1.9% over the same period of last year,among which domestic crude oil increased by 0.2% while natural gas increased by 6.7%,compared with the same period of last year. Exploration and Production Segment realised an operating profit of RMB 2.143 billion from previous loss.
Exploration and
Production
Unit
For three-month period
ended 31 March
Changes
(%)
2019
2018
Oil and gas production
million boe
113.46
111.33
1.9
Crude oil production
million barrels
70.81
71.35
(0.8)
China
million barrels
61.55
61.43
0.2
Overseas
million barrels
9.26
9.92
(6.7)
Natural gas
production
billion cubic feet
255.79
239.83
6.7
Realised crude oil price
USD/barrel
57.66
59.80
(3.6)
Realised natural gas price
USD/thousand cubic feet
7.07
6.28
12.6
Note 1Conversion: for domestic production of crude oil,1 tonne = 7.10 barrels; for overseas production
of crude oil,1 tonne=7.21 barrels; for production of natural gas,1 cubic meter = 35.31 cubic feet.
Refining:The Company adjusted the product mix in response to market demand by increasing production of gasoline and jet fuel. Diesel-to-gasoline ratio further declined to 1.01. We comprehensively optimised our production plans,moderately increased the export of oil products and realized stable operation at high utilisation rate. At the meantime,we implemented bunker fuel quality upgrading plan. In the first quarter,refinery throughput grew by 2.7% and refined oil products production grew by 3.8%,among which gasoline up by 5.9% and kerosene up by 6.6% over the same period of last year. Refining Segment realised an operating profit of RMB 11.963 billion.
Refining[2]
Unit
For three-month period
ended 31 March
Changes
(%)
2019
2018
Refinery throughput
million tonnes
61.78
60.16
2.7
Gasoline,diesel and
kerosene production
million tonnes
39.44
37.98
3.8
Gasoline
million tonnes
15.87
14.98
5.9
Diesel
million tonnes
16.03
15.93
0.6
Kerosene
million tonnes
7.54
7.07
6.6
Light chemical feedstock
million tonnes
10.07
9.94
1.3
Light product yield
%
76.07
76.22
(0.15) Percentage
points
Refining yield
%
94.78
95.23
(0.45) Percentage
points
Note 2Including 100% production of domestic joint ventures.
Marketing and Distribution:We brought our advantages of integrated business and distribution network into full play. Through increasing marketing efforts and a flexible and targeted marketing strategy to maintain sustained growth in total domestic sales volume and retail business scale. The Company upgraded distribution network to further strengthen our existing advantages. Vehicle natural gas market was further expanded. Self-owned brands development ensured steady development of non-fuel business. In the first quarter,total sales volume of refined oil products was 49.74 million tonnes with an increase of 5.4%,among which domestic sales volume up by 5.2% and retail business scale up by 2.5% over the same period of last year. The Marketing and Distribution Segment realised an operating profit of RMB 7.866 billion.
Marketing and Distribution
Unit
For three-month period
ended 31 March
Changes
(%)
2019
2018
Total sales volume of refined oil
products
million tonnes
49.74
47.21
5.4
Total domestic sales volume of
refined oil products
million tonnes
45.61
43.35
5.2
Retail
million tonnes
30.20
29.46
2.5
Direct sales & Distribution
million tonnes
15.41
13.89
10.9
Throughput per station[3]
tonnes
3,939
3,846
2.4
Note 3Throughput per station was annualized.
Unit: stations
As of 31
March
2019
As of 31
December
2018
Changes from the end of last
year to the end of the reporting
period (%)
Total number of
Sinopec-branded service
stations
30,671
30,648
0.1
Number of
company-operated stations
30,665
30,642
0.1
Chemicals: The Company followed the development philosophy of "basic plus high-end" to enhance effective supply. We persistently fine-tuned chemical feedstock mix to lower cost. The Company strengthened the links among R&D,production,marketing and customer,and maximised production of high-end products output tailored to market demands. The ratio of new and specialty products in synthetic resin reached 63.6% and differential ratio of synthetic fibre reached 90.3%. We enhanced the dynamic optimisation of facilities and product chain,and improved the utilisation and production scheduling based on market demand. We reinforced the capacity structural adjustment by constructing several key projects actively. The Company promoted targeted marketing and servicing to further expand our business. In the first quarter,ethylene production reached 3.049 million tonnes,up by 1.8% and chemical sales volume was 23.373 million tonnes,up by 14.3% over the same period of last year. The Chemicals Segment realised an operating profit of RMB 6.953 billion.
Chemicals[4]
Unit
For three-month
period ended 31 March
Changes
(%)
2019
2018
Ethylene
thousand tonnes
3,049
2,995
1.8
Synthetic resin
thousand tonnes
4,178
4,117
1.5
Synthetic rubber
thousand tonnes
271
199
36.2
Monomers and polymers for
synthetic fiber
thousand tonnes
2,575
2,246
14.6
Synthetic fiber
thousand tonnes
322
296
8.8
Note 4Including 100% production of domestic joint ventures.
Capital expenditure:In the first quarter,the total capital expenditure was RMB 11.914 billion. Capital expenditures for Exploration and Production Segment were RMB 5.562 billion,mainly for Fuling and Weirong shale gas development projects,Hangjinqi natural gas development project,Shengli and Northwest crude oil development projects,phase I of Xinjiang gas pipeline,phase I of Erdos-Anping-Cangzhou gas pipeline,Wen 23 and Jintan gas storages,as well as overseas projects. Capital expenditure for the refining segment was RMB 1.995 billion,mainly for Zhongke Refining and Petrochemical project,Zhenhai,Tianjin,Maoming and Luoyang refineries and the construction of Rizhao-Puyang-Luoyang crude oil pipeline. Capital expenditure for the marketing and distribution segment was RMB 2.521 billion,mainly for construction of refined oil products depots,pipelines,service stations,non-fuel business and the renovation of underground oil tanks etc. Capital expenditure for the chemicals segment was RMB 1.799 billion,mainly for ethylene projects in Zhongke,Zhenhai and Phase II of Hainan high-efficiency and environment-friendly aromatics project. Capital expenditure for corporate and others was RMB 37 million,mainly for R&D facilities and information technology projects.
Appendix: Principal financial data and indicators
Principal financial data and indicators prepared in accordance with CASs
Units: RMB million
Items
As of 31 March
2019
As of 31 December
2018
Changes from the end
of the preceding year
to the end of the
reporting period (%)
Total assets
1,813,445
1,592,308
13.9
Total equity attributable to equity
shareholders of the Company
739,653
718,355
3.0
Items
For the three months ended 31 March
Changes over the
same period of the
preceding year (%)
2019
2018
Net cash flow from operating
activities
(14,609)
12,052
-
Operating income
717,579
621,251
15.5
Net profit attributable to equity
shareholders of the Company
14,764
18,770
(21.3)
Net profit attributable to equity
shareholders of the Company
excluding extraordinary gains and
losses
14,371
17,982
(20.1)
Weighted average return on net
assets (%)
2.03
2.55
(0.52)percentage
points
Basic earnings per share (RMB)
0.122
0.155
(21.3)
Diluted earnings per share (RMB)
0.122
0.155
(21.3)
Extraordinary gain/loss items
For the three months ended 31 March 2019
(gains)/loss (RMB million)
Net loss on disposal of non-current assets
64
Donations
3
Government grants
(870)
Gains on holding and disposal of various investments
20
Other extraordinary income and expenses,net
285
Subtotal
(498)
Tax effect
126
Total
(372)
Equity shareholders of the Company
(393)
Minority interests
21
Principal financial data and indicators prepared in accordance with IFRS
Units: RMB million
Items
As of 31 March
2019
As of 31 December
2018
Changes from the end
of the preceding year to
the end of the
reporting period (%)
Total assets
1,308
13.9
Total equity attributable to
owners of the Company
738,578
717,284
3.0
Items
For the three months ended 31 March
Changes over the same
period of the preceding
year (%)
2019
2018
Net cash generated from
operating activities
(14,052
-
Operating profit
24,841
29,218
(15.0)
Net profit attributable to
ownersof the Company
15,468
19,306
(19.9)
Basic earnings per share
(RMB)
0.128
0.159
(19.5)
Diluted earnings per share
(RMB)
0.128
0.159
(19.5)
Return on net assets (%)
2.09
2.59
(0.50)percentage points
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,fertiliser 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 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.
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
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Email: ir@sinopec.com Email: ir@sinopec.com
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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
