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Sinopec's Net Profit for 2020 Q3 Reached RMB 23.507 Billion Campaign of Continuously Tiding Over Difficulties and Improving Performances Achieves Favorable Results with Significant Improvement of Operation and Profitability

·12-min read


EQS-News / 29/10/2020 / 10:43 UTC+8

Press release

(For immediate release)

 

 

 

Sinopec's Net Profit for 2020 Q3 Reached RMB 23.507 Billion

Campaign of Continuously Tiding Over Difficulties and Improving Performances Achieves Favorable Results with Significant Improvement of Operation and Profitability

 

(28 October 2020, Hong Kong, China) China Petroleum & Chemical Corporation ("Sinopec Corp." or the "Company") (HKEX: 00386; SSE: 600028; NYSE: SNP) today announced its unaudited results for the nine months ended 30 September 2020.

 

Financial Highlights

 

 

 

 

Operating Review

 

In the first three quarters of 2020, due to the worldwide spread of COVID-19, global economy was depressed and the global market was shrinking. The growth of China's economy turned positive, with GDP up by 0.7% year-on-year in the first three quarters, among which up by 4.9% in the third quarter, indicating a good continuous recovery momentum. In the first three quarters of 2020, the average spot price of Platts Brent was USD 42.5 per barrel, down by 34.4% year on year. Domestic demand for natural gas and chemical products maintained growth and demand for refined oil products recovered steadily quarter on quarter.

 

Confronted with the severe and complex market situation, the Company adhered to the principles of "focusing on main challenges, system optimization, bottom-line risks prevention and control and seizing opportunities out of crisis" and vigorously adjusted structure, expanded market, reduced inventory and tapped potential. On the basis of favorable results of "100-day campaign to tide over difficulties and improve performances", the Company launched a higher standard campaign of continuously tiding over difficulties and improving performances, seized the opportunity of domestic market demand recovery and made all-out efforts to tide over the difficulties of pandemic along with low crude oil price and achieved significant improvement of operation and profitability. The Company completed the transaction of oil and gas pipeline assets on 30 September 2020 and the contribution of asset appreciation to earnings was booked in the third quarter.

 

Exploration and Production: Under low crude oil price environment, the Company insisted on high-quality exploration, focused on profit-driven development, accelerated capacity building and proactively expanded market and sales of natural gas and further deepened the maintaining oil production, increasing gas output and reducing cost. In exploration, new discoveries were made in Tarim Basin, Jiyang Depression and Sichuan Basin, etc. In oil development, we increased the application of technologies to lower cost and optimized projects implementation plan, which helped to further decrease our cost. In natural gas development, we accelerated capacity building in West Sichuan, Dongsheng and Weirong gas fields, and continuously progressed with the development of Fuling, Puguang and Yuanba gas fields. In the first three quarters, domestic crude production kept stable and sales of natural gas increased by 9.86% year on year, realizing a continued growth in market share of natural gas. The exploration and production segment realised earnings before interest and taxes (EBIT) of RMB 13.16 billion in the third quarter. 

 

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.

 

Refining: With the market oriented approach, the Company took advantage of the recovery of domestic demand in the third quarter, further integrated production and marketing, maintained high utilization rates of facilities and maximized the profitability of value chain. We dynamically adjusted product mix, increased the supply of chemical feedstock and increased production of asphalt, lubricant and other marketable products. We optimized crude oil procurement and decreased cost. In the third quarter, refinery throughput was 63.51 million tonnes, up by 11.0% quarter on quarter and 1.9% year on year and 38.01 million tonnes of refined oil products were produced, representing a quarter-on-quarter increase of 11.2%, and 10.53 million tonnes of light chemical feedstock were produced, representing a quarter-on quarter increase of 15.0% and a year-on-year increase of 5.3%. The refining segment realized EBIT of RMB 31.55 billion in the third quarter.

 

Note : Including 100% production of domestic joint ventures.

 

Marketing and Distribution: Facing fierce market competition, the Company strengthened market analysis, leveraged the advantages of integration, balanced volume and profit, expanded sales and increased profit, and achieved continuous recovery in sales volume. We innovated marketing model by introducing the "one click refueling", etc., promoted the integration of online and offline business, created a new service model of reducing physical contact while refueling and shopping in a more efficient and convenient way to constantly improve our services. In the third quarter, domestic sales volume of refined oil products was 45.44 million tonnes, up by 0.4% quarter on quarter. The marketing and distribution segment realized EBIT of RMB 18.24 billion in the third quarter.

 

Note: The total sales volume of refined oil products includes the amount of trading volume.

 

Chemicals: The Company fine-tuned chemical feedstock mix to further lower costs, optimized operation and product slate, increased the ratio of high value-added products with the ratio of new and specialty synthetic resin reaching 68.6% and ratio of high value-added synthetic rubber reaching 31.3%. Construction of key projects was accelerated. In the third quarter, ethylene output was 3.07 million tonnes, up by 11.8% quarter-on-quarter. We accelerated expanding high-end products market, such as medical resin, antibacterial materials and automotive material etc. and optimized layout and logistics operation to enhance profitability of business chain. In the third quarter, the total chemical sales volume was 22.33 million tonnes, up by 0.86% quarter on quarter. The chemical segment realized EBIT of RMB 4.22 billion in the third quarter.

 

Note : Including 100% production of domestic joint ventures.

 

Capital expenditure: Focusing on quality and profitability of investment, the Company continuously optimised our investment projects. In the first three quarters, total capital expenditures were RMB 71.858 billion. Capital expenditures for the exploration and production segment were RMB 32.172 billion, mainly for capacity building in Shengli, Northwest, West Sichuan and Dongsheng oil and gas projects. Capital expenditures for the refining segment were RMB 13.819 billion, mainly for Zhongke project, Zhenhai, Tianjin, Maoming and Luoyang refining upgrading projects. Capital expenditures for the marketing and distribution segment were RMB 13.768 billion, mainly for construction of service stations, oil products depots and non-fuel business development. Capital expenditures for the chemicals segment were RMB 10.458 billion, mainly for Zhongke, Zhenhai, and Gulei, ethylene revamping for Sinopec-SK and Jiujiang aromatics projects, and melt blown fabrics projects. Capital expenditures for corporate and others were RMB 1.641 billion, mainly for R&D facilities and IT application projects.

 

 

 

Appendix: Principal financial data and indicators

Principal financial data and indicators prepared in accordance with CASs

 

 

Principal financial data and indicators prepared in accordance with 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, 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

Emailir@sinopec.com    Emailir@sinopec.com

 

Hong Kong

Tel(852) 2824 2638        Tel(852) 2522 1838

Fax(852) 2824 3669       Fax(852) 2521 9955

Emailir@sinopechk.com      Emailsinopec@prchina.com.hk



File: Sinopec's Net Profit for 2020 Q3 Reached RMB 23.507 Billion Campaign of Continuously Tiding Over Difficulties and Improving Performances Achieves Favorable Results with Significant Improvement of Operation and Profitability

29/10/2020 Dissemination of a Marketing Press Release, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

Media archive at www.todayir.com

Exploration and Production

Unit

Nine-month period ended 30 September

Changes

2020

2019

(%)

Oil and gas production

million boe

339.39

341.74

(0.7)

Crude oil production

million barrels

210.65

212.78

(1.0)

China

million barrels

186.69

186.69

0.0

Overseas

million barrels

23.96

26.09

(8.2)

Natural gas production

billion cubic feet

772.14

773.41

(0.2)

Realised crude oil price

USD/barrel

38.24

58.82

(35.0)

Realised natural gas price

USD/thousand cubic feet

5.32

6.19

(14.1)

Refining

Unit

Nine-month period ended 30 September

Changes

(%)

2020

2019

Refinery throughput

million tonnes

174.46

186.26

(6.3)

Gasoline, diesel and kerosene production

million tonnes

105.19

119.54

(12.0)

Gasoline

million tonnes

42.46

47.20

(10.0)

Diesel

million tonnes

47.86

49.01

(2.3)

Kerosene

million tonnes

14.87

23.33

(36.3)

Light chemical feedstock production

million tonnes

29.54

30.05

(1.7)

Light product yield

%

74.63

76.44

(1.81)

percentage points

Refining yield

%

94.89

94.99

(0.10)

percentage points

Marketing and Distribution

Unit

Nine-month period ended 30 September

Changes

(%)

2020

2019

Total sales volume of refined oil products

million tonnes

162.25

192.42

(15.7)

Total domestic sales volume of refined oil products

million tonnes

123.19

139.25

(11.5)

Retail

million tonnes

83.06

91.80

(9.5)

Direct sales & Distribution

million tonnes

40.13

47.45

(15.4)

Annualised average throughput per station

tonnes/station

3,605

3,991

(9.7)

Chemicals

Unit

Nine-month period ended 30 September

Changes

(%)

2020

2019

Ethylene

thousand tonnes

8,850

9,295

(4.8)

Synthetic resin

thousand tonnes

12,773

12,749

0.2

Monomers and polymers for synthetic fibre

thousand tonnes

6,711

7,511

(10.7)

Synthetic fibre

thousand tonnes

935

968

(3.4)

Synthetic rubber

thousand tonnes

790

794

(0.5)

Units: RMB million

Items

As of 30 September

2020

As of 31 December

2019

Changes from the end of the preceding year to the end of the reporting period (%)

Total assets

1,799,388

1,755,071

2.5

Total equity attributable to equity shareholders of the Company

729,179

739,169

(1.4)

 

7-9' 2020

Year-on-year%

1-9' 2020

Year-on-year%

Net cash flow from operating activities

43,845

(9.6)

83,639

2.8

Operating income

520,371

(29.1)

1,554,617

(30.4)

Net profit attributable to equity shareholders of the Company

46,389

288.4

23,507

(45.7)

Net profit attributable to equity shareholders of the Company excluding extraordinary gains and losses

14,147

27.5

(10,257)

-

Basic earnings per share (RMB)

0.383

288.4

0.194

(45.7)

Units: RMB million

Items

As of 30 September

2020

As of 31 December

2019

Changes from the end of the preceding year to the end of the reporting period (%)

Total assets

1,799,388

1,755,071

2.5

Total equity attributable to shareholders of the Company

728,198

738,150

(1.3)

 

7-9' 2020

Year-on-year%

1-9' 2020

Year-on-year%

Net cash generated from operating activities

43,845

(9.6)

83,639

2.8

Operating profit

26,529

38.2

5,028

(92.6)

Net profit attributable to shareholders of the Company

46,184

284.2

24,459

(44.7)

Basic earnings per share (RMB)

0.381

284.2

0.202

(44.7)

Exploration and Production

Unit

Nine-month period ended 30 September

Changes

2020

2019

(%)

Oil and gas production

million boe

339.39

341.74

(0.7)

Crude oil production

million barrels

210.65

212.78

(1.0)

China

million barrels

186.69

186.69

0.0

Overseas

million barrels

23.96

26.09

(8.2)

Natural gas production

billion cubic feet

772.14

773.41

(0.2)

Realised crude oil price

USD/barrel

38.24

58.82

(35.0)

Realised natural gas price

USD/thousand cubic feet

5.32

6.19

(14.1)

Refining

Unit

Nine-month period ended 30 September

Changes

(%)

2020

2019

Refinery throughput

million tonnes

174.46

186.26

(6.3)

Gasoline, diesel and kerosene production

million tonnes

105.19

119.54

(12.0)

Gasoline

million tonnes

42.46

47.20

(10.0)

Diesel

million tonnes

47.86

49.01

(2.3)

Kerosene

million tonnes

14.87

23.33

(36.3)

Light chemical feedstock production

million tonnes

29.54

30.05

(1.7)

Light product yield

%

74.63

76.44

(1.81)

percentage points

Refining yield

%

94.89

94.99

(0.10)

percentage points

Marketing and Distribution

Unit

Nine-month period ended 30 September

Changes

(%)

2020

2019

Total sales volume of refined oil products

million tonnes

162.25

192.42

(15.7)

Total domestic sales volume of refined oil products

million tonnes

123.19

139.25

(11.5)

Retail

million tonnes

83.06

91.80

(9.5)

Direct sales & Distribution

million tonnes

40.13

47.45

(15.4)

Annualised average throughput per station

tonnes/station

3,605

3,991

(9.7)

Chemicals

Unit

Nine-month period ended 30 September

Changes

(%)

2020

2019

Ethylene

thousand tonnes

8,850

9,295

(4.8)

Synthetic resin

thousand tonnes

12,773

12,749

0.2

Monomers and polymers for synthetic fibre

thousand tonnes

6,711

7,511

(10.7)

Synthetic fibre

thousand tonnes

935

968

(3.4)

Synthetic rubber

thousand tonnes

790

794

(0.5)

Units: RMB million

Items

As of 30 September

2020

As of 31 December

2019

Changes from the end of the preceding year to the end of the reporting period (%)

Total assets

1,799,388

1,755,071

2.5

Total equity attributable to equity shareholders of the Company

729,179

739,169

(1.4)

 

7-9' 2020

Year-on-year%

1-9' 2020

Year-on-year%

Net cash flow from operating activities

43,845

(9.6)

83,639

2.8

Operating income

520,371

(29.1)

1,554,617

(30.4)

Net profit attributable to equity shareholders of the Company

46,389

288.4

23,507

(45.7)

Net profit attributable to equity shareholders of the Company excluding extraordinary gains and losses

14,147

27.5

(10,257)

-

Basic earnings per share (RMB)

0.383

288.4

0.194

(45.7)

Units: RMB million

Items

As of 30 September

2020

As of 31 December

2019

Changes from the end of the preceding year to the end of the reporting period (%)

Total assets

1,799,388

1,755,071

2.5

Total equity attributable to shareholders of the Company

728,198

738,150

(1.3)

 

7-9' 2020

Year-on-year%

1-9' 2020

Year-on-year%

Net cash generated from operating activities

43,845

(9.6)

83,639

2.8

Operating profit

26,529

38.2

5,028

(92.6)

Net profit attributable to shareholders of the Company

46,184

284.2

24,459

(44.7)

Basic earnings per share (RMB)

0.381

284.2

0.202

(44.7)

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