Sinopec Corp. Announces 2010 Third Quarter Results

Oct 28, 2010, 09:54 ET from China Petroleum & Chemical Corporation

BEIJING, Oct. 28 /PRNewswire-Asia-FirstCall/ -- China Petroleum & Chemical Corporation ("Sinopec Corp." or "the Company") (CH: 600028; HKEX: 386; NYSE: SNP; LSE: SNP) today announced its unaudited results for the first nine months ending September 30, 2010.

    Financial Highlights:

    -- In accordance with the PRC Accounting Standards for Business
       Enterprises ("ASBE"), the Company's turnover in the first nine months
       of 2010 was RMB 1,427.622 billion, up 59.8% over the same period in
       2009. Net profit attributed to equity shareholders of the Company was
       RMB 56.397 billion, representing an increase of 11.6% over the previous
       year. Basic earnings per share was RMB 0.650, rising by 11.6% year-on-
       year.

    -- In accordance with the International Financial Reporting Standards
       ("IFRS"), the Company's turnover, other operating revenues and other
       income amounted to RMB 1,427.622 billion, representing an increase of
       59.8%. Net profit attributable to equity shareholders of the Company
       was RMB 56.445 billion, up by 11.5% compared to the same period last
       year. Basic earnings per share was RMB 0.651, up by 11.5% year-on-year.

    -- Capital expenditure for the first three quarters was RMB 55.822
       billion.

    Business Highlights

    -- The Exploration and Production Segment recorded an operating profit of
       RMB 40.838 billion for the first nine months, up 140.7% compared to the
       same period last year. The Company produced 34.93 million barrels of
       crude oil and 8.87 billion cubic meters of natural gas representing an
       increase of 1.9% and 45.0% respectively, over the same period of last
       year.

    -- The Refining Segment generated an operating profit of RMB 8.491
       billion, representing a decrease of 60.6% from the same period of last
       year. The refinery throughput of crude recorded a year-on-year increase
       of 14.4% to 154 million tonnes.

    -- The Marketing and Distribution Segment recorded an operating profit of
       RMB 23.306 billion, representing a year-on-year increase of 4.2%. The
       total domestic sales of refined oil products and the sales through
       retail channels amounted to 104.35 million tonnes and 64.14 million
       tonnes, representing a year-on-year increase of 16.5% and 11.2%
       respectively.

    -- The Chemicals Segment reported an operating profit of RMB 10.393
       billion, a decrease of 27.3% from the same period of last year. The
       output of ethylene and synthetic resin reached 6.61 million tonnes and
       9.532 million tonnes, up 39.4% and 28.7% respectively.

Mr. Wang Xinhua, Chief Finance Officer of Sinopec Corp. commented: "In the first three quarters of 2010, China's economy continued to grow rapidly. Domestic demand for oil products and chemical products has grown steadily. The Company has achieved continuous growth and economic gains by seizing the opportunity to further expand, optimizing production operations, exploring growth potential and enhancing efficiency."

Highlights of Results

PRINCIPAL FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH CHINA ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES ("ASBE")

    (Unit: RMB millions)


                                  At       At December 31,  Changes from the
                               September        2009              end
                               30, 2010                     of last year (%)
    Total assets (RMB
     millions)                   939,609        886,896               5.9
    Total equity attributable
     to equity
    shareholders of the          406,266        379,593               7.0
     Company
    (RMB millions)
    Net assets per share
     attributable to
     equity shareholders of the
     Company (RMB)                 4.686          4.378               7.0


                                   Nine-month period ended September 30
                                           (January - September)
                                                            Changes over the
                                                                  same
                                   2010              2009    period of the
                                                               preceding
                                                                year (%)
    Net cash flow from
     operating activities         95,240          109,164           (12.8)
    (RMB millions)
    Net cash flow from
     operating activities
     per share (RMB)               1.098            1.259           (12.8)


                                Three-month period    Nine-month period ended
                                       ended               September 30
                                   September 30        (January - September)
                                (July - September)

                                            Changes                 Changes
                                             over                    over
                                           the same                the same
                               2010  2009  period of   2010   2009 period of
                                              the                     the
                                           preceding               preceding
                                             year                  year (%)
                                              (%)
    Net profit attributable to
     equity shareholders of the
     Company (RMB millions)   19,621 17,091  14.8     56,397 50,555    11.6
    Basic earnings per share
     (RMB)                     0.226  0.197  14.8      0.650  0.583    11.6
    Diluted earnings per share
     (RMB)                     0.224  0.197  13.7      0.642  0.580    10.7
    Basic earnings per share
     (before extraordinary
     gain and loss) (RMB)      0.221  0.191  15.7      0.625  0.575     8.7
    Fully diluted return on
     net assets (%)             4.83   4.66  0.17      13.88  13.78    0.10
                                           percentage               percentage
    Weighted average return on
     net assets (%)             4.71   4.69  0.02      13.94  14.32   (0.38)
                                           percentage               percentage
                                             points                   points
    Weighted average return
     (before extraordinary gain
     and loss) on net
     assets (%)                 4.65   4.56  0.09      13.49  14.17   (0.68)
                                           percentage               percentage
                                             points                   points



     PRINCIPAL FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH
            INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS")

                         At September 30   At December 31   Changes from the
                               2010             2009              end
                                                            of last year (%)
    Total assets (RMB
     millions)                952,085          898,263              6.0
    Total equity
     attributable to
     equity shareholders
     of the Company (RMB
     millions)                404,793          378,072              7.1
    Net assets per share
     (RMB)                      4.669            4.361              7.1
    Adjusted net assets
     per share (RMB)            4.584            4.282              7.1


                                       Nine-month period ended
                                             September 30
                                        (January - September)
                                                            Changes over the
                                                                  same
                                    2010             2009    period of the
                                                               preceding
                                                                year (%)
    Net cash flow
     generated from
     operating activities
     (RMB millions)                94,958          108,771           (12.7)


                          Three-month period ended   Nine-month period ended
                                September 30              September 30
                             (July - September)       (January - September)

                                           Changes                  Changes
                                           over the                   over
                                             same                   the same
                          2010      2009    period    2010    2009 period of
                                            of the                    the
                                          preceding                preceding
                                           year (%)                 year (%)
    Profit attributable
     to equity
     shareholders of the 19,638   17,118      14.7   56,445  50,638    11.5
     Company
    (RMB millions)
    Basic earnings per
     share (RMB)          0.226    0.197      14.7    0.651   0.584    11.5
    Diluted earnings per
     share (RMB)          0.224    0.197      13.7    0.643   0.581    10.7
    Return on net assets
     (%)                   4.85     4.68      0.17    13.94   13.86    0.08
                                           percentage               percentage
                                             points                   points

BUSINESS REVIEW

Exploration & Production Segment: Over the first three quarters of 2010, management sought to optimize exploration activity, and enhance the reserve development rate, the rate of oilfield recovery and single well oil production. Commencing the commercial operation of the Sichuan-Eastern China Gas Project was a key priority, alongside efforts to improve coordination between the production and marketing of natural gas, and ensure a safe and stable gas supply. In the first three quarters, the Company recorded an operating profit of RMB 40.838 billion for the first nine months, up 140.7% compared to the same period last year. The output of crude oil and natural gas amounted to 34.93 million tonnes and 8.87 billion cubic meters, respectively, representing year-on-year growth of 1.9% and 45.0%, respectively.

Refining Segment: During the first three quarters, efforts were made to ensure the safety of the high-load operations of oil refining, increase refinery throughput, enhance the product mix, and increase the production of jet fuel, diesel oil and chemical light oil. In addition, the Company enhanced marketing efforts around non-regulated products with high added value. In the first three quarters, the Company generated an operating profit of RMB 8.491 billion, representing a decrease of 60.6% from the same period of last year. The Company processed 154 million tonnes of crude oil, representing year-on- year growth of 14.41%.

Marketing and Distribution Segment: The Company optimized its operating structure to expand terminal sales, accelerate the development of newly-built service stations and further develop the non-fuel business. In the first three quarters, the Company recorded an operating profit of RMB 23.306 billion, representing a year-on-year increase of 4.2%. Domestic distribution and retail of oil products amounted to 104.35 million tonnes and 64.14 million tonnes, respectively, representing year-on-year growth of 16.50% and 11.22%, respectively.

Chemicals Segment: The Company ensured that the Tianjin and Zhenhai ethylene plants were brought on stream smoothly and have continued to operate safely, and oversaw increased output of chemical products. The Company also expanded the market for its chemical products and reinforced the integration of production, sales and research, and sold all the products produced. In the first three quarters, the Company reported an operating profit of RMB 10.393 billion, a decrease of 27.3% from the same period of last year. Ethylene output reached 6.61 million tonnes, representing year-on-year growth of 39.42%, while the output of synthetic resin reached 9.532 million tonnes, representing year-on-year growth of 28.67%.



    Summary of Principal Operating Results for the First Nine Months

                                         Nine-month period ended    Changes
                                               September 30        over the
                                                                  same period
    Operating Data         Unit                                   of the
                                               2010        2009    preceding
                                                                     year
                                                                      (%)
    Exploration and
     Production
    Crude oil            Ten thousand
     production(Note 1)     tonnes              3,493      3,427        1.93
    Natural gas        Hundred million
     production          cubic meters           88.70      61.17       45.00
    Crude oil price      RMB / tonne
     realized(Note 1)                           3,411      2,239       52.34
    Natural gas price   RMB / thousand
     realized               cubic               1,132        960       17.92
                            meters

                                    Refining

    Refinery throughput  Ten thousand          15,376     13,439       14.41
                            tonnes
    Gasoline, diesel     Ten thousand
     oil and kerosene       tonnes
     production                                 9,225      8,363       10.31
    Including
     Gasoline            Ten thousand
                            tonnes              2,689      2,557        5.16
     Diesel oil          Ten thousand
                            tonnes              5,599      5,056       10.74
     Kerosene            Ten thousand
                            tonnes                937        750       24.93
    Light chemical
     feedstock           Ten thousand
     production             tonnes              2,586      1,931       33.92
    Light products
     yield                    %                 75.71%     75.30%       0.41
                                                                    percentage
    Refinery yield            %                 94.78%     94.28%       0.50
                                                                    percentage


                           Marketing and Distribution

    Total domestic       Ten thousand
     sales volume of        tonnes
     oil products                              10,435      8,957       16.50
    Including
     Retail volume       Ten thousand
                            tonnes              6,414      5,767       11.22
     Direct sales        Ten thousand
      volume                tonnes              2,443      1,751       39.52
     Wholesale           Ten thousand
        volume              tonnes              1,578      1,439        9.66

    Total number of
     service stations      Stations            30,050     29,522        1.79
    Including:
     company-operated      Stations            29,467     28,874        2.05
     franchised            Stations               583        648      (10.03)
    Annualized pumped
     volume per
     station (Note 2)    Ton/station            2,901      2,663        8.94


                               Chemicals (Note 3)

    Ethylene              Ten thousand
                             tonnes              661.0      474.1      39.42
    Synthetic resin       Ten thousand
                             tonnes              953.2      740.8      28.67
    Synthetic rubber      Ten thousand
                             tonnes               71.9       64.0      12.34
    Synthetic fiber
     monomer and          Ten thousand           652.4      572.8      13.90
     polymer                 tonnes
    Synthetic fiber       Ten thousand
                             tonnes              103.0       96.7       6.51
    Urea                  Ten thousand
                             tonnes              112.8      140.2     (19.54)

    Note 1: Data regarding crude oil production and the realized price for
            2009 were restated upon the acquisition of Sinopec Group Angola's
            upstream assets
    Note 2: Pumped volume per station data is an annualized average;
    Note 3: Including 100% outputs of Joint Ventures.


Capital expenditure:

In the first three quarters of 2010, the Company's accumulated capital expenditure amounted to RMB 55.822 billion.

Of that, capital expenditure in the Exploration and Production Segment amounted to RMB 25.572 billion. Notable achievements included the successful completion of the Sichuan-to-Eastern China Gas Project, which went into commercial operation. Newly-built crude oil production capacity and newly-built natural gas production capacity reached 3.83 million tonnes per year and 561 million cubic meters per year, respectively.

Capital expenditure in the Oil Refining Segment amounted to RMB 8.787 billion with special focus on upgrading oil product quality. A low-grade crude oil adaptive-processing reconstruction project and a storage and pipeline construction project have been launched smoothly and on schedule.

Capital expenditure in the Chemical Segment amounted to RMB 7.145 billion, with ethylene projects in Tianjin and Zhenhai commencing commercial production on schedule.

Capital expenditure in the Marketing and Distribution Segment amounted to RMB 13.326 billion, with notable achievements made in the construction and acquisition of service stations in key areas. 1,282 service stations have now been developed.

Headquarters and other capital expenditures amounted to RMB 992 million.

About Sinopec Corp.

Sinopec Corp. is a Chinese company that has been listed in Hong Kong, New York, London and Shanghai. The Company is an integrated energy and chemical company with upstream, midstream and downstream operations. The principal operations of Sinopec Corp. and its subsidiaries include: exploring, developing, producing and trading crude oil and natural gas; processing crude oil into refined oil products; producing, trading, transporting, distributing and marketing refined oil products; and producing and distributing chemical products. Based on 2009 turnover, Sinopec Corp. is the largest listed company in China. The Company is one of the largest crude oil and petrochemical companies in China and Asia. It is also one of the largest gasoline, diesel and jet fuel and other major chemical products producers and distributors in China and Asia.

For additional information about Sinopec Corp., please visit the Company's website at http://www.sinopec.com

    For more information, please contact:

    Investor Inquiries:

    Beijing
    Tel: (8610) 59960028
    Fax: (8610) 59960386
    Email: ir@sinopec.com

    Hong Kong
    Tel: (852) 28242638
    Fax: (852) 28243669
    Email: ir@sinopechk.com

    Media Inquiries:

    Beijing
    Tel: (8610) 59960028
    Fax: (8610) 59960386
    Email: media@sinopec.com

    Hong Kong
    Tel: (852) 35125000
    Fax: (852) 22599008
    Email: sinopec@brunswickgroup.com

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.

SOURCE China Petroleum & Chemical Corporation



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