BEIJING, Aug. 28, 2016
/PRNewswire/ -- China Petroleum & Chemical Corporation
("Sinopec" or the "Company") (HKEX: 386; SSE: 600028; NYSE: SNP)
today announced its interim results for the six months ended
30 June 2016.
Financial Highlights:
- In accordance with the International Financial Reporting
Standards (IFRS), the Company's operating profit was RMB 35.1 billion, representing a decline of 13.3%
from the same period last year. Profit attributable to equity
shareholders of the Company was RMB 19.9
billion. Basic earnings per share were RMB 0.165.
- In accordance with China Accounting Standards for Business
Enterprises ("ASBE"), the Company's operating profit was
RMB 34.3 billion, representing a
decrease of 12.9% over the same period of 2015. Net profit
attributable to the equity shareholders of the Company was
RMB 19.3 billion. Basic earnings per
share were RMB 0.159
- In accordance with IFRS, the Company's liability-to-asset ratio
was 43.46%, representing a decrease of 1.98 percentage points
compared with the end of last year, the lowest level since its
listing. The Company's cash and cash equivalents increased by
RMB 4.1 billion as compared to the
beginning of this year. The Company's cash flow and financial
position further improved.
- The Board of Directors declared an interim dividend of
RMB0.079 per share, which was in line
with payout ceiling set out in the Articles of Association.
Business Highlights:
The first half of 2016 saw weak global economic recovery.
China's GDP grew by 6.7% year on
year. The oil products pricing mechanism was further improved and
the floor on refined oil price was established. Domestic apparent
consumption of refined oil products was up 4.4% year on year.
Gasoline and kerosene consumption remained growth momentum, while
diesel consumption declined further, showing continuous divergence
in the consumption mix of oil products. Domestic consumption of
major chemicals continued to grow. Ethylene equivalent consumption
increased by 1.7% when compared with the first half of 2015.
Chemical prices dropped amid the decline in feedstock prices, but
chemical products margin maintained at high levels.
- Exploration and Production: the Company effectively optimised
exploration and development activities. Its continuing efforts in
exploration paid off with major discoveries in a number of regions.
It attached great importance to the development of natural gas and
actively expanded shale gas business. As for production operation,
the Company strengthened cost discipline, substantially reduced
low-efficiency and high-cost oil production, and increased natural
gas production. This segment realized an operating loss of
RMB 21.9 billion in the first half of
2016 but continued to generate cash inflow from operating
activities.
- Refining: the Company adjusted its product mix in response to
sharp increase of throughput from other refineries and abundant
market supply. The Company further optimised its oil product mix by
increasing the production of gasoline, kerosene and light chemical
feedstock with a further decline in diesel-to-gasoline ratio. In
the first half of 2016, this segment realised an operating profit
of RMB 32.6 billion, representing an
increase of 113% year on year. The refining margin was RMB 514.4 per tonne, representing an increase of
47.9% year on year.
- Marketing and Distribution: the Company coordinated and
optimised internal and external resources and took full advantage
of the synergies between its fuel and non-fuel businesses,
achieving growth in their total business volume and retail
transactions despite ample fuel supply and strong competition in
the market. In addition, the Company adjusted marketing efforts by
increasing the retail operation of premium products with
high-octane numbers. Non-fuel business sustained rapid development
with transaction amount significantly increased by 43% year on
year. This segment's operating profit was RMB 15.8 billion, representing an increase of
RMB 600 million year on year.
- Chemicals: the Company continued to adjust the structure of its
feedstock, products and facilities. The Company further lowered the
feedstock cost for ethylene, strengthened the integration among
production, sales, product R&D and customer needs. The
proportion of performance polymer and differentiated products
further increased. The Company maintained low inventory operation
and implemented differentiated marketing strategy. Total
transaction of chemical products increased by 8.3% year on year.
This segment's operating profit in the first half of 2016
stabilized at RMB 9.7 billion.
Mr. Wang Yupu, Chairman of Sinopec, said, "In the first half of
2016, the Company spared no effort to expand its markets,
optimise its operations, control costs, adjust asset structure and
manage risks. Focusing on the growth of quality and profitability,
the Company emphasised on structural adjustment, deepening reform,
innovation-driven strategy and strengthening coordination of all
aspects of work. Looking ahead into the second half of 2016,
China's economic growth is
expected to remain steady, which will drive the growth of domestic
demand for refined oil products and petrochemical products. We will
remain focused on implementing the development plan for 2016
through 2020—transforming the pattern of growth, adjusting asset
structure, upgrading asset quality and promoting sustainable growth
to achieve superior business results."
Business Review
Exploration and Production
To address the challenges of low oil prices, the Company
optimised exploration and production activities in the first half
of this year and achieved satisfactory results. Its continuing
efforts in exploration paid off with major discoveries in the Tahe
of Xingjiang Autonomous Region, Beibu Gulf of the Guangxi, and the Yin-E Basin in Inner Mongolia
Autonomous Region and new nature gas findings in west Sichuan and the Erdos Basin. A strong focus
was placed on the development of natural gas. Phase Two shale gas
development project in Fuling Shale Gas field further facilitated
its shale gas development. Production in the first half of 2016 was
218.99 million barrels of oil equivalent, of which domestic crude
production was 128.38 million barrels, overseas crude production
was 25.79 million barrels, and total gas production was 388.69
billion cubic feet. In production, The Company strengthened cost
discipline, reduced high-cost oil production, and increased natural
gas production.
In the first half of 2016, operating revenues of the segment
were RMB 52.5 billion, representing a
decrease of 25.4% year on year. This was mainly due to lower sales
prices of crude oil and decreased city-gate price of natural gas
which was adjusted by the Chinese government in November 2015. In the first half of 2016, the oil
and gas lifting cost was RMB 744 per
tonne, representing a decrease of 3.6% year on year mainly due to
the Company's strict control over costs and expenses.
Exploration and
Production: Summary of Operations
|
|
Six-month period
ended 30 June
|
Changes
|
2016
|
2015
|
(%)
|
Oil and gas
production (mmboe)
|
218.99
|
232.95
|
(5.99)
|
Crude oil production
(mmbbls)
|
154.17
|
174.07
|
(11.43)
|
China
|
128.38
|
147.47
|
(12.95)
|
Overseas
|
25.79
|
26.60
|
(3.05)
|
Natural gas
production (bcf)
|
388.69
|
353.26
|
10.03
|
Refining
In the first half of this year, the Company adjusted its product
mix in response to sharp increase of throughput from independent
refineries and ample market supply. The Company further optimised
its oil product mix by increasing the production of gasoline,
kerosene and light chemical feedstock and decreasing the ratio
between diesel and gasoline, reduced its crude purchasing costs,
moderately increased refined oil products export and pressed ahead
with oil products standards upgrading. Centralized marketing of the
lubricant, LPG and asphalt businesses helped enhance the
profitability of those products. In the first half of 2016, the
Company processed 116 million tonnes of crude oil and produced
73.26 million tonnes of refined oil products, with production of
gasoline and kerosene up by 3.74% and 3.36%, respectively, from
levels in the first half of 2015.
In the first half of 2016, operating revenues of the segment
were RMB 397.0 billion, representing
a decrease of 18.3% year on year. This was mainly attributable to
sharply decreased prices of products.
In the first half of 2016, the refining margin (defined as sales
revenues less crude oil and refining feedstock costs and taxes
other than income tax, divided by the throughput of crude oil and
refining feedstock) was RMB 514.4 per
tonne, representing an increase of 47.9% year on year. The change
was mainly attributable to refining segment's efforts in advancing
oil products quality upgrading, optimising product mix, increasing
high-value-added products yield and expanding the market to
increase the profitability of other refined oil products. In the
first half of 2016, the segment realised an operating profit of
RMB 32.6 billion, representing an
increase of RMB 17.3 billion year on
year.
Refining: Summary of
Operations
|
|
Six-month period
ended 30
June
|
Changes
|
2016
|
2015
|
(%)
|
Refinery throughput
(million tonnes)
|
115.90
|
118.89
|
(2.51)
|
Gasoline, diesel and
kerosene production
(million tonnes)
|
73.26
|
74.75
|
(1.99)
|
Gasoline (million
tonnes)
|
28.03
|
27.02
|
3.74
|
Diesel (million
tonnes)
|
32.93
|
35.82
|
(8.07)
|
Kerosene (million
tonnes)
|
12.30
|
11.90
|
3.36
|
Light chemical
feedstock production
(million tonnes)
|
19.37
|
19.07
|
1.57
|
Light yield
(%)
|
76.61
|
76.69
|
(0.08) percentage
points
|
Refining yield
(%)
|
94.75
|
94.98
|
(0.23) percentage
points
|
Note: Includes 100% of production of domestic joint
ventures.
Marketing and Distribution
In the first half of 2016, the Company coordinated and optimised
resources and took full advantage of the synergy between its fuel
and non-fuel businesses, achieving growth in both total business
volume and retail sales despite ample fuel supply and strong
competition in the market. In addition, the Company adjusted
marketing efforts by increasing the retailing of premium products
with high-octane numbers. The Company further improved its product
pipeline network, accelerated the building of service stations and
optimised marketing network. The total sales volume of refined oil
products in the first half of 2016 was up by 4.5% from the
corresponding period last year to 97.17 million tonnes, of which
domestic sales accounted for 86.51 million tonnes, up by 3.1%.
Non-fuel business transaction was up by 43% from the first half of
2015 to 18.5 billion yuan owing to
Internet+ marketing promotions and other measures.
In the first half of 2016, the operating revenues of the segment
were RMB 501.0 billion, decreased by
11.4 % year on year. This was mainly due to declined prices of
gasoline and diesel. The Company has actively expanded the sales
volume, which has partially offset the effect of the declined
prices. In the first half of 2016, due to higher retail ratio of
high-value-added and high octane number oil products and more
external resources, the margin of oil product sales was increased.
The segment's operating profit was RMB 15.8
billion, representing an increase of RMB 600 million year on year.
Marketing and
Distribution: Summary of Operations
|
|
Six-month period
ended 30 June
|
Changes
|
2016
|
2015
|
(%)
|
Total sales volume of
refined oil products
(million tonnes)
|
97.17
|
92.97
|
4.52
|
Total domestic sales
volume of refined oil
products (million tonnes)
|
86.51
|
83.92
|
3.09
|
Retail (million
tonnes)
|
59.65
|
58.19
|
2.51
|
Direct sales and
Wholesale (million
tonnes)
|
26.86
|
25.73
|
4.39
|
Annualised average
throughput per station
(tonne/station)
|
3,889
|
3,816
|
1.91
|
|
As of 30 June
2016
|
As of 31
December 2015
|
Change from
the end of last
year(%)
|
Total number of
Sinopec-branded service
stations
|
30,688
|
30,560
|
0.42
|
Company-operated
|
30,675
|
30,547
|
0.42
|
Chemicals
In the first half of this year, the Company continued to adjust
the structure of its feedstock, products and facilities to address
market changes and maximize profit. The Company further lowered the
feedstock cost for ethylene, strengthened the integration among
production, sales, product R&D and customer needs, and
continuously optimised operations of its manufacturing facilities,
which has achieved great results. Ethylene production for the first
half of 2016 was 5.478 million tonnes, up by 0.38% from the
corresponding period last year. The Company strengthened the
R&D, production and marketing capability of new higher value
products, with the specialty performance polymer reaching 58% and
the differential ratio of synthetic fiber reaching 83.2%. At the
same time, the Company held firm to its strategies of low
inventories and differentiated marketing. In the first half of
2016, total chemicals sales volume increased by 8.3% from the
corresponding period last year to 32.82 million tonnes.
In the first half of 2016, operating revenues of the chemicals
segment were RMB 149.2 billion,
representing a decrease of 11.0% year on year, which was mainly due
to declined chemical products prices year on year. In the first
half of 2016, the operating expenses of the segment were
RMB 139.5 billion, representing a
decrease of 11.5% year on year, which was mainly due to continuous
optimisition of raw materials mix and efforts to reduce production
costs. The segment's operating profit in the first half of 2016 was
RMB 9.7 billion, representing a
decrease of 3.8% year on year.
Major Chemical
Products: Summary of
Operations
Unit of production: 1,000 tonne
|
|
Six-month period
ended 30 June
|
Changes
|
2015
|
2014
|
(%)
|
Ethylene
|
5,478
|
5,457
|
0.38
|
Synthetic
resin
|
7,500
|
7,476
|
0.32
|
Synthetic fiber
monomer and polymer
|
4,672
|
4,322
|
8.10
|
Synthetic
fiber
|
637
|
638
|
(0.16)
|
Synthetic
rubber
|
411
|
453
|
(9.27)
|
Note: Includes 100% of production of domestic joint
ventures.
Health, Safety and the Environment
Work safety has always been at the core of its operations and
the Company continued to strengthen its safety management in the
first half of 2016. The Company conducted special work to reduce
safety risks in its oil and gas pipelines and tank farms, put
protective measures in place to cope with strong rainfall and bad
weather, and realised safe production on general.
The Company strengthened its green and low-carbon strategy by
intensifying its work in environmental protection, energy
conservation and emissions control. The Company continued to
advance its energy performance contract model and energy management
system, defined the projects of its Energy Efficiency Doubling
initiative, and completed its Clear Water, Blue Sky program. In the
first half of 2016, energy intensity was down by 0.69%, chemical
oxygen demand in discharged waste water was down by 7.88%, ammoniac
nitrogen emissions were down by 3.96%, sulfur dioxide emissions
were down by 6.88%, and NOx emissions were down by 3.02% from
levels in the corresponding period last year, and all hazardous
chemicals, discharged water, gas, and solid waste were properly
treated.
Capital Expenditures
To address the changing business environment in the first half
of 2016, the Company improved the decision-making mechanism for
investments and focused on managing investment return and
increasing growth quality and efficiency. Total capital
expenditures were 13.474 billion
yuan. Capital expenditures for the exploration and
production segment were 5.168 billion
yuan, mainly for Phase Two of shale gas development in
Fuling, the LNG terminals in Guangxi and Tianjin, and Phase Two of the Jinan-Qingdao
gas pipeline. Capital expenditures for the refining segment were
2.774 billion yuan, mainly for
gasoline and diesel quality upgrading and refinery optimisation
projects. Capital expenditures for the marketing and distribution
segment were 2.61 billion yuan,
mainly for renovations of service stations, refined oil products
pipelines and depots and safety projects. Capital expenditures for
the chemicals segment were 2.44 billion
yuan, mainly for feedstock and product optimization projects
and coal chemical projects of East Ningxia project and
Zhongtianhechuang project. Capital expenditures for corporate and
others were 482 million yuan, mainly
for R&D facilities and IT application projects.
Business Prospects
China's economic growth is
expected to be steady in the second half of 2016, which will drive
the growth of domestic demand for refined oil products and
petrochemical product. The consumption mix of oil products shall
continue to change, and demand for chemical products shall be
gradually going for more high-end products. Yet over-supply in the
international oil market is likely to persist, and international
oil prices will stay at a low level. The competitiveness of naphtha
based chemicals as feedstock will remain strong. Against this
background, The Company will spare no effort to expand its markets,
optimise its operations, control costs, adjust asset structure and
manage risks with the following focuses in each business
segment:
The Company will maintain the level of input intensity in
exploration and optimise planning of its exploration program to
achieve high efficiency. For oil products, the Company will
strengthen phased exploration and reservoir evaluation for oil
projects to increase the quality of new projects and apply refined
management over existing projects. For natural gas, the Company
will speed up key capacity building projects, optimise production
and sales, intensify reservoir assessment in west Sichuan and Northeast China, and press ahead with
development of Fuling Shale Gas field. In the second half of 2016,
the Company plan to produce 147 million barrels of crude oil, of
which domestic production will account for 125 million barrels and
overseas production will account for 22 million barrels. The
Company plan to produce 421.2 billion cubic feet of natural gas
during the period.
The Company will base its refining facility utilisation rates on
market conditions, allocate crude resources and refining throughput
according to profit margins and regional conditions, optimise its
product slate to increase high-value-added products, and emphasise
technology R&D. The Company will continue to lower the
diesel-to-gasoline ratio, upgrade the refiled oil products''
quality, increase clean fuel production and expand the sales volume
of lubricants, LPG and asphalt. The Company plan to process 120
million tonnes of crude in the second half of the year.
The Company will focus on both sales volume and profits in
marketing and distribution business, with profits as priority goals
of operation. The Company will redouble efforts to expand its
markets, increase its retail volume, optimise its sales structure,
develop its automotive gas business by building and operating more
CNG/LNG stations, and promote its non-fuel businesses by improving
operations of convenience stores, adding new and specialty products
and innovating its business model, and shall facilitate its
transformation into a modern, comprehensive service provider. The
Company plan to sell 84 million tonnes of refined oil products in
the domestic market in the second half of the year.
The Company will further optimise its chemical feedstock
structure to further reduce cost of feedstock, and operations and
intensify profit analysis and evaluation of its product value chain
and facilities. Contribution to profit margins will determine the
slate of production and utilisation of facilities, and the Company
will strengthen optimisation of product mix, produce more new and
high-value-added products in accordance with market demand. The
Company will strengthen the development and application of new
products, and upgrade three major synthetic materials. The Company
will also make further improvements to the marketing network and
customer services by providing its customers with value-added
services and integrated solutions. The Company plan to produce 5.56
million tonnes of ethylene in the second half of 2016.
In the second half of the year, The Company will remain focused
on implementing the development plan for 2016 through
2020—transforming the pattern of growth, adjusting asset structure,
upgrading asset quality and promoting sustainable growth to achieve
superior business results.
Appendix: Key financial data and
indicators
FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH
ASBE
Principal accounting
data
|
Items
|
Six-month periods
ended 30 June
|
Changes
over the same
period of the
preceding year
(%)
|
2016
RMB
million
|
2015
RMB
million
|
Operating
income
|
879,220
|
1,041,131
|
(15.6)
|
Net profit
attributable to equity
shareholders of the Company
|
19,250
|
24,456
|
(21.3)
|
Net profit
attributable to equity
shareholders of the Company
after deducting
extraordinary gain/loss
items
|
18,290
|
23,431
|
(21.9)
|
Net cash flows from
operating activities
|
76,112
|
67,095
|
13.4
|
|
At 30 June
2016
RMB
million
|
At 31 December
2015
RMB
million
|
Change from the
end of last
year(%)
|
Total equity
attributable to equity
shareholders of the Company
|
692,934
|
677,538
|
2.3
|
Total
assets
|
1,432,624
|
1,447,268
|
(1.0)
|
Principal financial
indicators
|
Items
|
Six-month periods
ended 30 June
|
Changes
over the same
period of the
preceding year
(%)
|
2016
RMB
|
2015
RMB
|
Basic earnings per
share
|
0.159
|
0.203
|
(21.7)
|
Diluted earnings per
share
|
0.159
|
0.203
|
(21.7)
|
Basic earnings per
share after deducting
extraordinary gain/loss items
|
0.151
|
0.194
|
(22.2)
|
Weighted average
return on net assets (%)
|
2.81
|
3.80
|
(0.99) percentage
points
|
Weighted average
return on net assets
after deducting extraordinary gain/loss
items (%)
|
2.67
|
3.65
|
(0.98) percentage
points
|
FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH
IFRS
Principal accounting
data
|
Items
|
Six-month periods
ended 30 June
|
Changes
over the same
period of the
preceding year
(%)
|
2016
RMB
million
|
2015
RMB
million
|
Operating
Profit
|
35,108
|
40,496
|
(13.3)
|
Net profit
attributable to owners of the
Company
|
19,919
|
25,423
|
(21.6)
|
Net cash generated
from operating
activities
|
76,112
|
67,095
|
13.4
|
|
At 30 June
2016
RMB
million
|
At 31 December
2015
RMB
million
|
Change from the
end of last year
(%)
|
Equity attributable
to owners of the
Company
|
691,642
|
676,197
|
2.3
|
Total
assets
|
1,432,624
|
1,447,268
|
(1.0)
|
Principal financial
indicators
|
Items
|
Six-month periods
ended 30 June
|
Changes
over the same
period of the
preceding year
(%)
|
2016
RMB
|
2015
RMB
|
Basic earnings per
share
|
0.165
|
0.211
|
(21.8)
|
Diluted earnings per
share
|
0.165
|
0.211
|
(21.8)
|
Return on capital
employed (%)
|
3.18
|
3.52
|
(0.34) percentage
points
|
The following table sets forth the operating revenues, operating
expenses and operating profit/(loss) by each segment before
elimination of the inter-segment transactions for the periods
indicated, and the percentage changes between the first half of
2016 and the first half of 2015.
|
Six-month periods
ended 30 June
|
Changes
|
2016
|
2015
|
RMB
million
|
(%)
|
Exploration and
Production Segment
|
|
|
|
Operating revenues
|
52,509
|
70,401
|
(25.4)
|
Operating expenses
|
74,438
|
72,227
|
3.1
|
Operating (loss)/profit
|
(21,929)
|
(1,826)
|
1,100.9
|
Refining
Segment
|
|
|
|
Operating revenues
|
396,969
|
485,735
|
(18.3)
|
Operating expenses
|
364,381
|
470,415
|
(22.5)
|
Operating (loss)/profit
|
32,588
|
15,320
|
112.7
|
Marketing and
Distribution Segment
|
|
|
|
Operating revenues
|
500,969
|
565,638
|
(11.4)
|
Operating expenses
|
485,192
|
550,450
|
(11.9)
|
Operating (loss)/profit
|
15,777
|
15,188
|
3.9
|
Chemicals
Segment
|
|
|
|
Operating revenues
|
149,186
|
167,644
|
(11.0)
|
Operating expenses
|
139,508
|
157,588
|
(11.5)
|
Operating (loss)/profit
|
9,678
|
10,056
|
(3.8)
|
Corporate and
others
|
|
|
|
Operating revenues
|
312,816
|
415,790
|
(24.8)
|
Operating expenses
|
312,394
|
415,014
|
(24.7)
|
Operating (loss)/profit
|
422
|
776
|
(45.6)
|
Elimination of
inter-segment
profit/(loss)
|
(1,428)
|
982
|
-
|
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
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
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/sinopec-achieves-operating-profit-rmb351-billion-in-1h2016-300319081.html
SOURCE China Petroleum & Chemical Corporation