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 October 29, 2015 - 12:07 PM EDT
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Sinopec Announces 2015 Third Quarter Results

Stable Productions and Operations by Leveraging the Advantages Across Integrated Value Chain

BEIJING, Oct. 29, 2015 /PRNewswire/ -- China Petroleum & Chemical Corporation ("Sinopec Corp." or the "Company")(HKEX: 386; SSE: 600028; NYSE: SNP) today announced its unaudited results for the nine months period ended 30September 2015.

China Petroleum & Chemical Corporation Logo

Results Review:

In the first three quarters of 2015, global economic recovery remained slow. China's GDP grew by 6.9%. International crude oil prices fluctuated at low level and continued to drop in the third quarter. Domestic refined oil product prices were adjusted timely in line with international crude oil prices with 5 consecutive cuts followed by one increase. Domestic apparent consumption of refined oil products grew by 2.6% over the same period of last year, driven by substantial increase of gasoline and kerosene consumption while diesel consumption dropped. Domestic demand for chemicals maintained a steady growth with ethylene equivalent consumption up by 3.2% compared with the same period of last year.

The Company, focusing on growth quality and profitability, through intensified analysis and forecasting of macro-economy and market trends, actively responded to the fluctuation of international crude oil price, fully leverage the advantages across the integrated value chain, kept the cost and expenses under control, and realised stable operations.

Exploration and Production

The Company took effective measures to cope with low oil prices, including optimising the exploration and production plans, setting up flexible investment decision making mechanism and cutting high-cost crude oil production. In exploration, we attained new discoveries in marine facies gas fields in western Sichuan. In development, Fuling shale gas and Yuanba gas projects progressed steadily. In the first three quarters, oil and gas production of the Company reached 350.82 million barrels of oil equivalent, down by 1.8%, out of which crude oil output dropped 2.4%, over the same period last year. Impacted by the sustained low crude oil price, Exploration and Production Segment had an operating loss of RMB 3.444 billion.

Refining

The Company optimised the crude oil allocation and processing plans, adjusted product slate and utilisation rate, and increased the yield of high value-added products, such as high-spec gasoline. We brought our scale advantages into full play to control the unit cost. We actively promoted the quality upgrading of refined oil products and provided high standard fuels to the market. We took our specialised business advantages to improve our dedicated marketing network. In the first three quarters, refinery throughput and refined oil products production increased by 1.4% and 2.9% respectively, among which gasoline up by 7.1%, jet fuel up by 17.2% and diesel down by 3.9% over the same period last year. Benefited by product yield optimisation and the refined oil product pricing mechanism improvement, Refining Segment had an operating profit of RMB 14.905 billion, up by 34.3% over the same period last year.

Marketing and Distribution

In light of the changes in supply and demand, the Company optimised marketing structure to increase retail volume and single station throughput. We accelerated the development of the non-fuel business and its interaction with fuel business, promoted the industrial cooperation and achieved volume and profit growth. We accelerated our transformation from an oil products supplier to a comprehensive service provider by using our network and brand advantages, upgrading the value creation capabilities of marketing network. In the first three quarters, total sales volume of refined oil products was 141 million tonnes, up by 1.9% over the same period last year. Total domestic sales volume of refined oil products was 127 million tonnes, up by 0.8%, of which retail volume reached 88.19 million tonnes, up by 1.9% over the same period last year. Transaction of non-fuel business reached RMB 19.2 billion, up by 66.7% compared with the same period last year. The operating profit of Marketing and Distribution Segment was RMB 21.5 billion, down by 18.7% over the same period last year.

Chemicals

The Company further optimised feedstock and product mix to achieve more cost-cutting and better efficiency. We put our efforts in R&D, production and marketing of new products, strengthened the coordination between R&D, production and marketing and maintained production volume growth of high value-added products, achieving better economic performance. The synthetic resin for special compound rate reached 59%, up by 1% and the synthetic fiber differentiation rate reached 81.8%, up by 5.7% over the same period last year. In the first three quarters, ethylene production reached 8.273 million tonnes, up by 5.3% and chemical sales volume was 45.38 million tonnes, up by 2.1% over the same period last year. Benefited by the structural adjustment, declining feedstock price and the competitive naphtha-based chemical products, the operating profit of Chemicals Segment was RMB 15.008 billion, up by RMB 18.524 billion over the same period last year.

Capital Expenditure

The Company's capital expenditures were RMB 38.065 billion in the first three quarters. Capital expenditure for Exploration and Production Segment was RMB 20.542 billion, mainly for development in Shengli oilfield, Tahe oilfield and Sichuan Basin, development of Fuling shale gas, LNG projects in Guangxi and Tianjin, pipeline pressure boosting for Sichuan to East China Gas Transmission Project, Jinan-to-Qingdao Gas Transmission PipelineⅡProject and overseas projects. Capital expenditure for Refining Segment was RMB 4.950 billion, mainly for refinery revamping and gasoline and diesel quality upgrading projects in Qilu and Jiujiang refineries. Capital expenditure for Marketing and Distribution Segment was RMB 7.149 billion, mainly for developing and renovating service (gas) stations, building oil products pipelines, oil depots and other storage facilities, and specific projects for safety hazards rectification and vapor recovery. We newly developed 272 service (gas) stations in the first three quarters of 2015. Capital expenditure for Chemicals Segment was RMB 4.2 billion, mainly for coal chemical projects and the Wuhan ethylene project. Capital expenditure for Corporate and Others was RMB 1.224 billion, mainly for R&D facilities and IT projects.

Summary of Principal Operating Results for the First Three Quarters  

Operating data

Unit

For nine-month period
ended 30 September

Changes

(%)

2015

2014

Exploration and production

Oil and gas production1

million boe

350.82

357.41

(1.84)

Crude oil production

million barrels

262.38

268.87

(2.41)

China

million barrels

222.42

232.51

(4.34)

Overseas

million barrels

39.96

36.36

9.90

Natural gas production

billion cubic feet

530.14

530.80

(0.12)

Realized crude oil price

USD/barrel

48.91

94.72

(48.36)

Realized natural gas price

USD/thousand cubic feet

7.12

7.05

0.99

Refining4

Refinery throughput

million tonnes

178.32

175.83

1.42

Gasoline, diesel and kerosene production

million tonnes

112.19

108.99

2.94


Gasoline

million tonnes

40.85

38.13

7.13


Diesel

million tonnes

53.32

55.50

(3.93)


Kerosene

million tonnes

18.01

15.37

17.18

Light chemical feedstock

million tonnes

29.40

29.70

(1.01)

Light products yield

%

76.62

76.65

(0.30)
percentage
points

Refining yield

%

94.78

94.66

0.12
percentage
points

Marketing and Distribution

Total sales of refined oil products

million tonnes

140.75

138.15

1.88

Total domestic sales volume of refined oil products

million tonnes

126.71

125.66

0.84


Retail

million tonnes

88.19

86.56

1.88


Direct sales & Wholesale

million tonnes

38.52

39.10

(1.48)

Total number of Sinopec-branded service stations2

stations

30,500

30,551

(0.17)


Company-operated

stations

30,487

30,538

(0.17)

Annualized average throughput per station3

tonnes/station

3,857

3,799

1.53

Chemicals4

Ethylene

thousand tonnes

8,273

7,858

5.28

Synthetic resin

thousand tonnes

11,265

10,748

4.81

Synthetic rubber

thousand tonnes

668

725

(7.86)

Monomers and polymers for synthetic fiber

thousand tonnes

6,684

6,253

(6.89)

Synthetic fiber

thousand tonnes

967

986

(1.93)

 

Note:

1.

Conversion: for domestic production of crude oil, 1 tonne = 7.1 barrels; for overseas production of crude oil, 1 tonne=7.21 barrels; for production of natural gas, 1 cubic meter = 35.31 cubic feet.

2.

The number of service stations in 2014 was the number as at 31 December 2014.

3.

Throughput per service station data was annualized.

4.

Including 100% production of joint ventures.

Appendix

Principal Financial Data and Indicators

Principal Financial Data and Indicators Prepared in Accordance with China Accounting Standards for Business Enterprises ("ASBE")



Units: million

Currency: RMB


As at 30
September 2015

As at 31
December 2014

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

Total assets

1,404,414

1,451,368

(3.24)

Total equity attributable to
     equity shareholders of
     the Company

675,496

594,483

13.63



Nine Months

%

2015

2014

Net cash flow from
     operating activities

116,593

108,247

7.71


Operating income

1,536,837

2,115,648

(27.36)

Net profit attributable to
     equity shareholders of
     the Company

25,848

51,169

(49.49)

Net profit attributable to
     equity shareholders of
     the Company after
     deducting extraordinary
     gain/loss items

24,677

49,317

(49.96)

Weighted average return on
     net assets (%)

4.05

8.71

(4.66)

percentage points

Basic earnings per share
     (RMB)

0.214

0.438

(51.14)

Diluted earnings per share
     (RMB)

0.214

0.437

(51.03)

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



Units: million

Currency: RMB


As at 30
September 2015

As at 31
December 2014

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

Total assets

1,404,414

1,451,368

(3.24)

Equity attributable to
     owners of the
     Company

674,130

593,041

13.67



Nine Months

%

2015

2014

Net cash generated from
     operating activities

116,593

108,247

7.71


Operating profit

49,476

76,364

(35.21)

Net profit attributable to
     equity shareholders of
     the Company

27,030

51,798

(47.82)

Basic earnings per share
     (RMB)

0.224

0.444

(49.55)

Diluted earnings per share
     (RMB)

0.224

0.442

(49.32)

Return on net assets (%)

4.01

8.74

(4.73)

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, 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.

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:

Tel: (86 10) 5996 0028                           
(852) 2824 2638
Fax: (86 10) 5996 0386                           
(852) 2824 3669
Email: ir@sinopec.com                           

Media Inquiries:

Tel: (86 10) 5996 0028
(852) 2522 1838
Fax: (86 10) 5996 0386
(852) 2521 9955
Email: sinopec@prchina.com.hk

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SOURCE China Petroleum & Chemical Corporation


Source: PR Newswire (October 29, 2015 - 12:07 PM EDT)

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