Sinopec Corp. Announces 1Q 2009 Results
Chemical Corporation (“Sinopec Corp.” or “the Company”) (CH: 600028; HKEX: 386;
NYSE: SNP; LSE: SNP) today announced its unaudited results for the first
quarter of the year which ended on
In accordance with the PRC Accounting Standards for Business Enterprises
(“ASBE”), the Company’s operating income decreased by 31.2% year on year to
equity shareholders of the parent company increased by 84.7% year on year to
In accordance with International Financial Reporting Standards (IFRS), the
Company’s operating income and other income decreased by 31.2% year on year to
attributed to equity shareholders of the Company increased by 85.1% year on
year to
Dai Houliang, senior vice president and chief financial officer of Sinopec
said, “In the first quarter 2009, the company achieved profits in all the
segments. Under the government’s new pricing mechanism for refined oil
products and tax reform, we have fully utilized our advantages in production
scale, cost control, structurally integrated operations and management, and
turned the refining segment into a major profit generator for the company. In
addition, the chemical segment has greatly improved its profitability, due to
a month by month rise in domestic demand for oil and refined products on the
back of the government’s economic stimulus plan.”
“The company optimized its debt structure and improved its cash flow in
the first quarter of 2009. We will continue to respond proactively to the
challenges of the macro-economic environment at home and abroad, by refining
our operating strategies, enhancing our management, exploiting our potentials
and improving efficiency, in an effort to achieve healthy and sustainable
development in our business.”
Highlights of Results
PRINCIPAL ACCOUNTING DATA AND FINANCIAL INDICATORS PREPARED IN ACCORDANCE
WITH THE PRC ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES (“ASBE”)
At At Changes from
31 March 31 December the end of the
2009 2008 preceding year
(%)
Total assets (RMB millions) 773,578 752,235 2.8
Shareholders' equity
attributable to equity
shareholders of the Company
(RMB millions) 341,536 330,080 3.5
Net assets per share
attributable to equity
shareholders of the
Company (RMB) 3.939 3.807 3.5
Three-month Three-month Changes over the
period ended period ended same period of the
31 March 2009 31 March 2008 preceding year
(%)
Net cash flow from
operating activities
(RMB millions) 55,655 5,255 959.1
Net cash flow from
operating activities
per share (RMB) 0.642 0.061 959.1
Net profit attributable to
equity shareholders of
the Company(RMB millions) 11,190 6,057 84.7
Basic earnings per share
(RMB) 0.129 0.07 84.7
Diluted earnings per share
(RMB) 0.129 0.043 200.0
Fully diluted return on net
assets (%) 3.28 1.89 1.39
percentage points
Fully diluted return (before
extraordinary gain and loss) 3.30 1.87 1.43
on net assets (%) percentage points
PRINCIPAL FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH
INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)
Changes from the
At 31 March At 31 December end of the
2009 2008 preceding year
(%)
Total assets (RMB
millions) 779,285 767,827 1.5
Total equity
attributable to equity
shareholders of the
Company (RMB millions) 340,154 328,669 3.5
Net assets per share
(RMB) 3.923 3.791 3.5
Adjusted net assets per
share (RMB) 3.833 3.699 3.6
Three-month Three-month Changes over the
period ended period ended same period of
31 March 2009 31 March 2008 the preceding year
(%)
Net cash generated from
operating activities
(RMB millions) 53,248 2,663 1,899.5
Profit attributable to
the equity shareholders
of the Company
(RMB millions) 11,219 6,062 85.1
Basic earnings per
share (RMB) 0.129 0.070 85.1
Diluted earnings per
share (RMB) 0.129 0.043 200.0
Return on net assets
(%) 3.30 1.89 1.41
percentage points
Operating results by segments in accordance with IFRS
Three months ended 31 March
(RMB Millions)
Operating profit / (loss) 2009 2008
Exploration and Production 2,756 11,540
Refining 7,328 (20,636)
Marketing and Distribution 3,771 10,762
Chemicals 2,799 1,549
Corporate and Others (160) (184)
Total operating profit/(loss) 16,494 3,031
Business Review
During the first quarter of 2009, confronted with the tough economic
situation at home and abroad, the Chinese government implemented a proactive
fiscal policy, moderately easy monetary policy, and carried out a series of
measures to expand domestic demand and facilitate economic growth, especially
with reforms in the pricing of refined oil products and with tax reform. The
effects of these reforms have been positive for the entire refining sector.
This has enabled Sinopec’s refining segment to leverage its advantages in
production scale, cost control, structurally integrated operations and
management, and turned the refining segment into a major profit generator for
the company. In the face of such challenges as the slowing demand growth for
oil and petrochemical products and intensifying market competition, Sinopec
took a number of measures to adapt to the market including optimizing product
structure, enlarging gross volume and focusing on production safety. The
Company also implemented energy-saving and effluent reduction measures. In
these ways the Company has achieved production and operational improvements.
Review of Operating Results by Segments
Exploration & Production (E&P): In the first quarter 2009, the Company
enhanced cost control and realised stable growth of crude oil production. It
also strengthened geological research, optimized prospecting deployment, and
increased input to prospecting, especially geophysical prospecting. Sinopec
also strived to enhance recovery rate and single well yield, as well as
controlling exploitation and operation costs. The
Project is approaching completion and we expect to connect all lines in June.
The capital expenditure in the first quarter for the E&P segment was
million
with the same period of last year. However, due to the significant drop in
price of crude oil, the operating profit of the E&P segment was
million
Refining: The Company optimized its production scheme in accordance with
the changes in the refined product market and the chemical raw material market,
while making efforts to cut costs, increase efficiency and improve
profitability. The capital expenditure for the refining segment was
million
facilities in Zhanjiang, and construction of a paraffin oil hydrogenation
plant in Jinling with a capacity of 2.6 million tonnes per year. Meanwhile,
the Company reinforced management of crude oil procurement, improved the
efficiency of pipeline operations, reduced the cost of transporting imported
crude and adjusted product structure. During the first quarter, the volume of
crude oil processed by Sinopec decreased by 3.27%, compared with the
corresponding period of last year and increased by 1.21% compared with the
previous quarter ending on
gasoline increased by 15.32% compared with the corresponding period of last
year and increased by 3.25% compared with the previous quarter ending on
December 2008
mechanism for refined oil products, which enabled Sinopec’s refining segment
to leverage its advantages in production scale, cost control, structurally
integrated operations and management. In the first quarter 2009, the
operating profit of the refining segment was
Marketing and Distribution: In the first quarter of 2009, domestic
consumption of refined oil products decreased year on year, and the
consumption of diesel registered a substantial drop. During the first quarter,
the domestic sales volume of refined products declined by 12.42% compared with
the corresponding period of last year, and decreased by 6.18% compared with
the previous quarter ending on
to the market changes and vigorously explored new market areas. It also
improved service and enhanced retail sales. The capital expenditure of the
marketing and distribution segment was
construction of gas stations and refined oil pipelines in important areas. In
total 56 gas stations were added. Under the new pricing mechanism for refined
oil products, the government has introduced a market-based ceiling price that
takes into account the cost of crude oil and replaces the guidance band for
retail fuel prices which was in use before. As a result, the profit margin
for the retail sector in
period last year. In the first quarter 2009, the operating profit of the
Company’s marketing and distribution segment was
substantially year on year.
Chemicals: In the first quarter of 2009, domestic demand for chemical
products decreased year on year. However, the Company enhanced its
competitiveness and service, and strengthened partnerships with key industries
and end users. It made full use of its geographical advantages and the
economies of scale arising from centralized sales. The Company also developed
flexible marketing strategies to expand market opportunities. The capital
expenditure of the chemical segment was
construction of two 1 million tonne per year ethylene projects in
Zhenhai. In the first quarter, the production volume of ethylene and
synthetic resin declined by 12.22% and 3.30% respectively compared to the
corresponding period of last year, while it increased by 3.41% and 4.52%
respectively compared with the previous quarter ending on
With a steady rise in demand for chemical products in the past months, both at
home and abroad, the gross profits from the company’s chemical products
segment grew gradually. The chemical segment achieved an operating profit of
Summary of Principal Operating Results for the First Quarter
Three-month period ended
Operating Data Unit 31 March Changes (%)
Year 2009 Year 2008
Exploration and Production
Crude oil 10 thousand
production tonnes 1039.56 1033.30 0.61
Natural gas 100 million cubic
production meters 19.82 20.57 (3.65)
Realised crude RMB/tonne 1599.01 3943.01 (59.45)
oil price
Realised natural RMB/thousand
gas price cubic meters 961.53 916.79 4.88
Refining
Refinery 10 thousand
throughput tonnes 4051.42 4188.53 (3.27)
Gasoline, diesel 10 thousand 2532.12 2553.52 (0.84)
and kerosene tonnes
production
Of which: Gasoline 10 thousand
tonnes 799.18 692.99 15.32
Diesel 10 thousand
tonnes 1514.73 1660.86 (8.80)
Kerosene 10 thousand
tonnes 218.21 199.67 9.29
Light chemical 10 thousand
feedstock tonnes 575.57 629.09 (8.51)
Light yield % 74.98 74.45 0.53
percentage
point
Refining yield % 93.69 93.81 (0.12)
percentage
point
Marketing and Distribution
Total domestic 10 thousand
sales of tonnes 2642.83 3017.70 (12.42)
refined oil
products
Of which:
Retail 10 thousand
tonnes 1736.70 2027.60 (14.35)
Distribution 10 thousand
tonnes 505.30 489.10 3.31
Wholesale 10 thousand
tonnes 400.80 501.00 (20.00)
Total number of Stations 29338 29130 0.71
service stations
Of which: Owned and Stations 28703 28477 0.79
self-
operated
Franchised Stations 635 653 (2.76)
Throughput per Tonne/station 2420 2848 (15.03)
station of
owned and
self-operated
(Note 1)
Chemicals (Note 2)
Ethylene 10 thousand tonnes 148.80 169.51 (12.22)
Synthetic resins 10 thousand tonnes 239.97 248.15 (3.30)
Synthetic rubbers 10 thousand tonnes 19.83 22.62 (12.33)
Monomers and 10 thousand tonnes 172.25 199.40 (13.62)
polymers for
synthetic
fibres
Synthetic fibres 10 thousand tonnes 31.49 35.49 (11.27)
Urea 10 thousand tonnes 36.17 28.27 27.94
Notes 1: Throughput per service station data is an annualised average;
Notes 2: Included 100% output of BASF-YPC and Shanghai Secco.
About Sinopec Corp.
Sinopec Corp. is the first Chinese company that has been listed in
Kong
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 2007 turnover, Sinopec Corp. is the largest listed company
in
companies in
and jet fuel and other major chemical products producers and distributors in
For additional information about Sinopec Corp., please visit the Company’s
website at http://www.sinopec.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