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Sinopec announces results for first three quarters of 2016

Published by
Hydrocarbon Engineering,


China Petroleum & Chemical Corporation (Sinopec Corp.) has announced its financial results for the first three quarters ended 30 September 2016.

Highlights

  • In accordance with the International Financial Reporting Standards (IFRS), the company's operating profit reached RMB51.430 billion, up 4.2% y/y. Net profit attributable to owners of the company was RMB30.107 billion, representing an increase of 11.2% y/y. Basic earnings per share were RMB0.249, up 11.2% y/y.
  • In accordance with the PRC Accounting Standards for Business Enterprises (ASBE), the company's revenue amounted to RMB1363.945 billion, down 11.3% y/y. Net profit attributable to equity shareholders of the company was RMB29.166 billion, up 12.6% y/y. Basic earnings per share were RMB0.241, up 12.6% y/y.
  • 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 RMB131.700 billion, up 13.3% y/y. Cash and cash equivalents at the end of the period were RMB81.149 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.

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 the Xinjiang Autonomous Region, Beibu Gulf in Guangxi and Yin-E Basin in the Nei Mongol Autonomous Region and new natural gas findings in the west Sichuan and Erdos Basin. In development, the Phase Two shale gas development project in the 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% y/y. 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 a steady unit load and pressed ahead with refined oil products quality upgrading. Based on customer needs, it strengthened its 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% y/y, respectively, among which gasoline was up 3.04%, jet fuel was up 4.28% and diesel was down 5.95% over the same period last year. EBIT of the refining segment was RMB43.504 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 the retail scale of premium products with a high octane number. It further improved its product pipeline network and accelerated the building of service stations. The 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. The total domestic sales volume of refined oil products was 130 million tonnes, up by 2.27% y/y. Transaction of non-fuel business reached RMB26.920 billion, up 40.21% when compared with the same period last year. EBIT of the marketing and distribution segment was RMB25.839 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 costs for ethylene, strengthened the integration among production, sales, product R&D and customer needs and continuously optimised operations of manufacturing facilities, which has achieved great results. It strengthened the R&D, production and marketing capabilities of new high value-added products, with performance polymer ratio reaching 59.7% and the 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% y/y. Chemical sales volume was 50.46 million tonnes, up 11.19% over the same period last year. EBIT of the chemicals segment was RMB19.135 billion, up 8.95% over the same period last year.

Read the article online at: https://www.hydrocarbonengineering.com/refining/28102016/sinopec-announces-results-for-first-three-quarters-of-2016/


 

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