Net Profit Surged 158% YoY to RMB 17.2 Billion in 1Q 2017
Mid- and
Down-stream Segments Achieve
Continuous Growth and Integrated Advantages Fully Reflected
BEIJING, April 27, 2017 /PRNewswire/ -- China Petroleum
& Chemical Corporation ("Sinopec Corp." or the "Company")(HKEX:
386; SSE: 600028; NYSE: SNP) today announced its unaudited results
for the three months ended 31 March
2017.
Financial Highlights:
- The price of international crude oil in the first quarter of
this year increased significantly, which helped the upstream
segment to reduce its losses as compared with the corresponding
period last year; and market demand for middle and downstream
products remained stable, and profitability increased as compared
with the corresponding period last year.
- In accordance with the International Financial Reporting
Standards (IFRS), the Company's operating profit was RMB 25.44 billion, up 95.2% year-on-year. Net
profit was RMB 22.26 billion, surged
132.5% year-on-year. Net profit attributable to owners of the
Company was RMB 17.20 billion,
increased by 157.9% year-on-year. Basic earnings per share ("EPS")
were RMB 0.142.
- In accordance with China Accounting
Standards for Business Enterprises ("ASBE"), the Company's
operating profit was RMB 27.89
billion, significantly increased by 126.5% year-on-year. Net
profit was RMB 21.68 billion, surged
by 140.0% year-on-year. Net profit attributable to equity
shareholders of the Company was RMB 16.63
billion, increased 168.7% year-on-year. Basic earnings per
share ("EPS") were RMB
0.137.
- The Company's financial position
continued to improve during the first quarter. In accordance with
IFRS, cash and cash equivalents at the end of the first quarter was
RMB 110.98 billion.
Liabilities-to-assets ratio at the end of the first quarter was
42.4%, down by 2.1 percentage points from the year end of
2016.
Business Review:
In the first quarter of 2017, focusing on enhancing growth
quality, improving profitability and asset upgrading, the Company
endeavoured to coordinate all aspects of work, mainly emphasising
on cost reduction, market expansion, structural adjustments,
consolidating growth basis and reforms, which resulted in notable
good operating results.
Exploration and Production:
The Company gave priority to high-efficiency exploration with
efforts on enhancing progressive exploration and reservoir
appraisal and made new oil discoveries in Shunbei area in Xinjiang,
as well as new natural gas findings in Sichuan basin. In development, we adopted a
profit-oriented approach, adjusting development activities and
enhancing cost discipline. Our production of natural gas increased
and Phase Two Fuling shale gas development project was progressed
according to the plan. In the first quarter, the oil and gas
production of the Company was 111.93 million barrels of oil
equivalent, declined by 2.4%, out of which crude oil output down by
9.2% while natural gas up by 12.8%, compared with the same period
last year. Exploration and Production Segment had an operating loss
of RMB 5.764 billion, less than by
RMB 6.762 billion compared with the
same period last year.
Refining:
The Company implemented market-oriented strategy, optimised
resource allocation and managed to lower the purchasing cost of
crude oil. We adjusted product mix and increased output of gasoline
and kerosene with diesel-to-gasoline ratio further declining. We
actively responded to challenges of abundant market supply by
moderately increasing export of oil products and as a result,
maintained our high utilisation rate. We brought our centralised
marketing advantages fully into play to further improve margins of
asphalt, lubricant, LPG and other products. We accelerated the
quality upgrading of GB VI refined oil products and GB V regular
diesel. In the first quarter, refinery throughput grew by 3.1% and
refined oil products production grew by 1.9%, among which gasoline
up by 2.8%, kerosene up by 7.1% and diesel down by 0.7% over the
same period last year. Refining Segment realised an operating
profit of RMB 16.754 billion, up by
24.6% compared with the same period last year.
Marketing and Distribution:
The Company intensified marketing strategy of balancing profits
and volume with priority on profits and gave full play of our
advantages in integrated operation and marketing network, as well
as optimising internal and external resources and adjusting
marketing tactics, to maintain total sales volume of refined oil
products stable. We improved our marketing network through planning
and construction of service stations as well as revamping storage
and transportation facilities of refined oil products. In the first
quarter, total sales volume of refined oil products was 47.44
million tonnes, up by 0.5% over the same period last year. Total
domestic sales volume of refined oil products was 41.94 million
tonnes, down by 3.1%. We accelerated the development of emerging
business of which transaction volume reached RMB 13.48 billion, up by 51.3% compared with the
same period last year. The operating profit of Marketing and
Distribution Segment was RMB 9.161
billion, up by 19.1% compared with the same period last
year.
Chemicals:
The Company fine-tuned its alignment among feedstock, facilities
and product mix to raise profitability. We seised market
opportunity of strong profitability from ethylene and ethylene
derivative products, optimised operations of facilities, increased
production of products well received in the market and
high-value-added products, as well as enhanced R&D, production
and promotion efforts on high-value-added products with specialty
and new products as a percentage of synthetic resins reaching 61.1%
and differential ratio of synthetic fiber reaching 88.2%. We
implemented differentiated marketing strategies through bringing
our advantages in distribution network into full play. In the first
quarter, ethylene production reached 2.941 million tonnes, up by
4.2%, chemical sales volume was 18.592 million tonnes, up by 19.0%
over the same period last year. The operating profit of Chemicals
Segment was RMB 8.509 billion, up by
87.0% compared with the same period last year.
Capital Expenditure:
The Company continued to focus on quality and profitability with
total capital expenditures of RMB 2,716
million in the first quarter. Capital expenditures for
exploration and production segment were RMB
1,461 million, mainly for Fuling shale gas development
projects, LNG terminal projects and overseas projects. Capital
expenditures for refining segment were RMB
804 million, mainly for building of Zhongke
refining-chemical base, structural adjustment and GB VI quality
upgrading of gasoline and diesel. Capital expenditures for
marketing and distribution segment were RMB
180 million, mainly for depots and storage facilities,
pipeline network and service stations. Capital expenditures for
chemical segment were RMB 225
million, mainly for Zhongke refining-chemical base and
Hainan aromatics project. Capital
expenditure for corporate and others were RMB 46 million, mainly for R&D and
information technology projects.
Summary of Principal Operating Results for the
First Quarter
Operating
data
|
Unit
|
For three-month
period ended 31 March
|
Changes
(%)
|
2017
|
2016
|
Exploration and
production
|
Oil and gas
production1
|
million
boe
|
111.93
|
114.68
|
(2.40)
|
Crude oil
production
|
million
barrels
|
72.08
|
79.42
|
(9.24)
|
China
|
million
barrels
|
60.67
|
66.35
|
(8.56)
|
Overseas
|
million
barrels
|
11.41
|
13.07
|
(12.70)
|
Natural gas
production
|
billion cubic
feet
|
238.35
|
211.36
|
12.77
|
Realised crude oil
price
|
USD/barrel
|
49.09
|
27.06
|
81.41
|
Realised natural gas
price
|
USD/thousand cubic
feet
|
5.00
|
5.47
|
(8.59)
|
Refining2
|
Refinery
throughput
|
million
tonnes
|
58.95
|
57.18
|
3.10
|
Gasoline, diesel and
kerosene production
|
million
tonnes
|
37.03
|
36.33
|
1.93
|
|
Gasoline
|
million
tonnes
|
14.31
|
13.92
|
2.80
|
|
Diesel
|
million
tonnes
|
16.21
|
16.32
|
(0.67)
|
|
Kerosene incl. jet
fuel
|
million
tonnes
|
6.51
|
6.08
|
7.07
|
Light chemical
feedstock
|
million
tonnes
|
9.97
|
9.74
|
2.36
|
Light product
yield
|
%
|
76.30
|
77.05
|
(0.75)
percentage
points
|
Refining
yield
|
%
|
95.29
|
94.93
|
0.36
percentage
points
|
Marketing and
Distribution
|
Total sales volume of
refined oil products
|
million
tonnes
|
47.44
|
47.21
|
0.49
|
Total domestic sales
of refined oil products
|
million
tonnes
|
41.94
|
43.29
|
(3.12)
|
|
Retail
|
million
tonnes
|
28.63
|
29.66
|
(3.47)
|
|
Direct sales &
Distribution
|
million
tonnes
|
13.31
|
13.63
|
(2.35)
|
Total number of
Sinopec-branded service stations3
|
stations
|
30,752
|
30,603
|
0.49
|
|
Company-operated
|
stations
|
30,746
|
30,597
|
0.49
|
Throughput per
station4
|
tonnes
|
3,725
|
3,879
|
(3.97)
|
Chemicals2
|
Ethylene
|
thousand
tonnes
|
2,941
|
2,823
|
4.18
|
Synthetic
resin
|
thousand
tonnes
|
4,074
|
3,840
|
6.09
|
Synthetic
rubber
|
thousand
tonnes
|
227
|
205
|
10.73
|
Monomers and polymers
for synthetic fiber
|
thousand
tonnes
|
2,424
|
2,328
|
4.12
|
Synthetic
fiber
|
thousand
tonnes
|
308
|
311
|
(0.96)
|
Note:
- Conversion: 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.
- Including 100% production of domestic joint ventures.
- The number of service stations in 2016 was the number as of
31 December 2016.
- Throughput per station was annualised.
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
|
|
As of 31 March
2017
|
As of 31 December
2016
|
Changes from the
end of the preceding year to the end of the reporting period
(%)
|
Total
assets
|
1,478,917
|
1,498,609
|
(1.3)
|
Total equity
attributable to equity shareholders of the Company
|
728,618
|
712,232
|
2.3
|
|
Three
months
|
Changes over the
same period of the preceding year (%)
|
2017
|
2016
|
Net cash flow from
operating activities
|
13,276
|
34,285
|
(61.3)
|
|
Operating
income
|
582,185
|
414,061
|
40.6
|
Net profit
attributable to equity shareholders of the Company
|
16,633
|
6,190
|
168.7
|
Net profit
attributable to equity shareholders of the Company excluding
extraordinary gains and losses
|
16,540
|
6,403
|
158.3
|
Weighted average
return on net assets (%)
|
2.31
|
0.97
|
1.34 percentage
points
|
Basic earnings per
share (RMB)
|
0.137
|
0.051
|
168.6
|
Diluted earnings per
share (RMB)
|
0.137
|
0.051
|
168.6
|
Extraordinary
gain/loss items
|
During the
reporting period
|
(gains)/losses(RMB
million)
|
Net loss on disposal
of non-current assets
|
16
|
Donations
|
9
|
Government
grants
|
(209)
|
Loss on holding and
disposal of various investments
|
(49)
|
Other extraordinary
income and expenses, net
|
100
|
Subtotal
|
(133)
|
Tax effect
|
33
|
Total
|
(100)
|
Equity shareholders of
the Company
|
(93)
|
Minority
interests
|
(7)
|
Principal financial data and indicators prepared in accordance
with International Financial Reporting standards (IFRS)
Units: RMB
million
|
|
As of 31 March
2017
|
As of 31 December
2016
|
Changes from the
end of the preceding year to the end of the reporting period
(%)
|
Total
assets
|
1,478,917
|
1,498,609
|
(1.3)
|
Total equity
attributable to owners of the Company
|
727,404
|
710,994
|
2.3
|
|
Three
months
|
Changes over the
same period of the preceding year (%)
|
2017
|
2016
|
Net cash generated
from operating activities
|
13,276
|
34,285
|
(61.3)
|
|
Operating
profit
|
25,435
|
13,027
|
95.2
|
Net profit
attributable to owners of the Company
|
17,199
|
6,668
|
157.9
|
Basic earnings per
share (RMB)
|
0.142
|
0.055
|
158.2
|
Diluted earnings per
share (RMB)
|
0.142
|
0.055
|
158.2
|
Return on net assets
(%)
|
2.36
|
0.94
|
1.42 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 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.
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
|
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SOURCE China Petroleum & Chemical Corporation
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