Sinopec's Net Profit for 9M 2016 Up Over 10% y-o-y to RMB 30 Billion

BEIJING, Oct. 27, 2016 /PRNewswire/ -- China Petroleum & Chemical Corporation ("Sinopec Corp." or the "Company") (HKEX: 386; SSE: 600028; NYSE and LSE: SNP) today announced its financial results for the first three quarters ended 30 September 2016.

Financial Highlights:

•  In accordance with the International Financial Reporting Standards ("IFRS"), the Company's operating profit reached RMB 51.430 billion, up 4.2% year-on-year. Net profit attributable to owners of the Company was RMB 30.107 billion, representing an increase of 11.2% year-on-year. Basic earnings per share were RMB 0.249, up 11.2% year-on-year.
• In accordance with the PRC Accounting Standards for Business Enterprises ("ASBE"), the Company's revenue amounted to RMB 1,363.945 billion, down 11.3% year-on-year. Net profit attributable to equity shareholders of the Company was RMB 29.166 billion, up 12.6% year-on-year. Basic earnings per share were RMB 0.241, up 12.6% year-on-year.
• The Company's cash flow and financial position continued to improve during the first three quarters. In accordance with IFRS, the Company's net cash flow from operating activities was RMB 131.700 billion, up 13.3% year-on-year. Cash and cash equivalents at the end of the period were RMB 81.149 billion. Liabilities-to-assets ratio at the end of the third quarter was 42.53%, down 3.01 percentage points from the year end of 2015.

Business Review:

For first three quarters in 2016, the Company focused on growth quality and profitability and further enhanced structure adjustment and management. It optimised market-oriented operation, fully leveraged advantages across the integrated value chain, coordinated all aspects of work and overcame the impact of natural disasters, obtained fine operating results.

Exploration and Production: To address the challenge of low oil prices, the Company effectively optimised exploration and production activities and achieved positive results. In exploration, through technological progress and efficiency promotion, it attained new discoveries in Tahe of Xinjiang Autonomous Region, Beibu Gulf in Guangxi and Yin-E Basin in Nei Mongol Autonomous Region and new natural gas findings in west Sichuan and Erdos Basin. In development, Phase Two shale gas development project in Fuling Shale Gas field further facilitated its shale gas development. In production, the Company strengthened cost discipline and reduced high-cost oil production. In the first three quarters, oil and gas production of the Company was 322.29 million barrels of oil equivalent, down 8.13% year-on-year. Out of which, crude oil output dropped by 12.58% from a year ago while natural gas output grew by 5.09%. Earnings before interest and taxes (EBIT) of the Exploration and Production segment were RMB -30.865 billion.

Refining: The Company actively responded to challenges arising from sharp increase of throughput from independent refineries, ample market supply and changes in refined oil products demand. It further optimised its refined oil product mix by increasing production of gasoline and kerosene, reduced its crude purchasing costs, kept steady unit load and pressed ahead with refined oil products quality upgrading. Based on customer need, it strengthened marketing service of other refined oil products, such as asphalt and LPG. In the first three quarters, refinery throughput and refined oil products production decreased by 1.72% and 1.04% year-on-year respectively, among which gasoline up 3.04%, jet fuel up 4.28% and diesel down 5.95% over the same period last year. EBIT of the Refining segment were RMB 43.504 billion, up 183.12% over the same period last year.

Marketing and Distribution: In light of ample domestic fuel supply and strong competition in the market, the Company coordinated and optimised internal and external resources, and adjusted marketing efforts, achieving growth in both total sales volume and retail sales volume, especially in retail scale of premium products with high octane number. It further improved its product pipeline network and accelerated the building of service stations. Non-fuel business kept fast development momentum owing to synergy between fuel and non-fuel businesses. In the first three quarters, total sales volume of refined oil products was 146 million tonnes, up by 3.53% over the same period last year. Total domestic sales volume of refined oil products was 130 million tonnes, up by 2.27% year-on-year. Transaction of non-fuel business reached RMB 26.920 billion, up 40.21% when compared with the same period last year. EBIT of the Marketing and Distribution segment were RMB 25.839 billion, up 14.50% over the same period last year.

Chemicals: The Company further optimised feedstock and product mix, as well as facilities structure. It further lowered feedstock cost for ethylene, strengthened the integration among production, sales, product R&D and customer need and continuously optimised operations of manufacturing facilities, which has achieved great results. It strengthened R&D, production and marketing capabilities of new high value-added products, with performance polymer ratio reaching 59.7% and differential ratio of synthetic fibre reaching 84.8%. It also focused on improving customer services to enhance customer loyalty. At the same time, it held firm to its strategies of low inventories and customised marketing. In the first three quarters, ethylene production reached 8.115 million tonnes, down 1.91% year-on-year. Chemical sales volume was 50.46 million tonnes, up 11.19% over the same period last year. EBIT of the Chemicals segment were RMB 19.135 billion, up 8.95% over the same period last year.

Capital Expenditures: The Company focused on growth quality and profitability, strengthened the management of investment return and optimisation of investment project. Its capital expenditures were approximately RMB 24.969 billion in the first three quarters. Capital expenditures for the Exploration and Production segment were RMB 9.206 billion, mainly for Phase Two of shale gas development in Fuling, LNG terminals in Guangxi and Tianjin, and Jinan-Qingdao gas pipeline II. Captial expenditures for the Refining segment were RMB 4.995 billion, mainly for gasoline and diesel quality upgrading and refinery optimisation and revamping projects. Capital expenditures for the Marketing and Distribution segment were RMB 5.983 billion, mainly for renovation of service stations, refined oil products pipelines, oil depots and safety hazard rectification projects. Capital expenditures for the Chemical segment were RMB 3.967 billion, mainly for feedstock and product optimisation projects and coal chemical projects. Capital expenditures for corporate and others were RMB 818 million, mainly for R&D facilities and IT application projects.

Summary of Principal Operating Results for the First Three Quarters

Appendix

Principal financial data and indicators

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.

SOURCE China Petroleum & Chemical Corporation