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Sinopec Corp Announces 2017 First Quarter Results
Apr 27, 2017 /PRNewswire via COMTEX/ -- Copyright (C) 2017 PR Newswire. All rights reserved

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

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 Highlightsï¼s

-- 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 Reviewï¼s

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

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)

Principal financial data and indicators prepared in accordance with International Financial Reporting standards (IFRS)

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.

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SOURCE China Petroleum & Chemical Corporation

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