Sinopec announces first quarter results

China Petroleum & Chemical Corporation (Sinopec Corp.) has announced its unaudited results for the three months ended 31 March 2015.

Financial highlights:

• In accordance with the International Financial Reporting Standards (IFRS), the company's turnover and other operating revenues was RMB478.24 billion, down 25.4% over the same period of last year. The company's operating profit was RMB5.15 billion, down 79.2% over the same period last year. Net profit attributable to equity shareholders of the company was RMB2.17 billion, down 84.6% over the same period last year. Basic earnings per share (EPS) was RMB0.018.
• In accordance with China Accounting Standards for Business Enterprises (ASBE), the company's operating revenue was RMB478.24 billion. The company's profit before taxation was RMB2.93 billion, down 84.8% over the same period last year. Net profit attributable to equity shareholders of the company was RMB1.69 billion, a decrease of 87.5% compared to the same period last year. Basic EPS was RMB0.014.
• In accordance with IFRS, the company's debt to asset ratio at the end of 1Q15 was lowered to 46.2%, down by 9.3 percentage points from the year end of 2014. Cash and cash equivalents at the end of the first quarter was RMB72.11 billion, a increase of RMB62.75 billion compared with the beginning of the year.

Business highlights:

• Exploration and Production: The company focused on improving the profitability through enhanced management and strictly controlled the investment and reduced the operating cost. The company maintained its fast track momentum in the construction of shale gas production capacity in Fuling. Gas development project for Phase II in Yuanba was under smooth progress. In the first quarter, the operating profit of the Exploration and Production segment decreased by RMB6.54 billion from the previous quarter, primarily impacted by the sustained low crude oil price.
• Refining: The company adjusted product slate and refining utilisation rates in response to the market conditions, increasing production of refined oil products and high value added products for which demand was strong, such as gasoline, especially highgrade gasoline and jet fuel, further decreasing the diesel to gasoline ratio. The company has digested the high cost crude oil inventories and steadily improved the overall profitability. The operating loss in the first quarter decreased by RMB9.7 billion compared with the previous quarter.
• Marketing and Distribution: The restructuring and reform of marketing business progressed smoothly. Capital contribution was completed on schedule. The company adjusted marketing strategies in light of changes of refined oil products demand. Both the total sales volume and the retail volume increased. Transaction of non-fuel business was up 75% y/y. The operating profit in the first quarter was up by RMB2.27 billion compared with the previous quarter.
• Chemicals: The company optimised the feedstock mix and reduced costs. The company fine tuned facilities operations, adjusted product slate and increased the production of high value added products, which were well received by markets. The profitability has been constantly improved. The operating profit in the first quarter increased by RMB1.73 billion from the previous quarter.

In the first quarter of 2015, the international crude oil prices fluctuated at low level after a slide last year. Domestic gasoline and diesel prices were adjusted with international crude oil prices. In the first quarter, China's GDP grew by 7.0% with a stable demand for refined oil products and chemical products. Domestic apparent consumption of refined oil products grew by 4.8% over the same period last year. The company, focusing on growth quality and profitability, strengthened reform, transformation and management. Faced with the low crude oil prices scenario, the company actively adjusted operational strategies to expand markets, enhance fine management and control costs. All of these efforts contributed to stable operations.

Adapted from press release by Rosalie Starling

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