Sinopec's net profit rose more than 20% to RMB 61.6 billion in 2018

Pekin, March 24, 2019 / PRNewswire / – China Petroleum & Chemical Corporation ("Sinopec Corp." or "the Company") (HKEX: 386; SSE: 600028; NYSE: SNP) today announced its annual results for the twelve-month period ended December 31, 2018.

Financial Highlights

• In accordance with IFRS, the Company's sales and other operating revenues have reached RMB 2.89 billion. The profit attributable to the shareholders of the company was RMB 61.6 billion, up 20.2% year-on-year. Basic earnings per share were RMB 0.509.
• In accordance with ASBE, the operating profit of the company has been RMB 101.5 billion, up 16.7% year-on-year. The profit attributable to the shareholders of the company was RMB 63.1 billion, up 23.4% from one year to the next. Basic earnings per share were RMB 0.521.
• In accordance with IFRS, the company's liability-to-badets ratio at the end of 2018 was 46.21%, a slight decrease of 0.33 percentage points from the end of the previous year. . The company has maintained a healthy financial situation. Cash and cash equivalents amounted to RMB 111.9 billion like a December 31, 2018, maintaining a healthy level.
• Upstream, we have worked hard to improve oil and gas exploration and production and achieved a national crude oil reserve replacement rate of 132%. At the same time, we continued to build a system for the production, supply, storage and marketing of natural gas, rapidly increasing the production and volume of natural gas sales. The operating profit of the refining sector was 54.8 billion RMB; Operating profit in the chemicals sector was RMB 27.0 billion; Operating profit for the marketing and distribution segment was RMB 23.5 billion.
• Taking into account the company's profitability, shareholder returns and future developments, the Board of Directors proposed a final dividend of RMB 0.26 per share. Combined with the interim dividend of RMB 0.16 per share, the total dividend for the year is 0.42 RMB per share. The payout ratio and dividend yield were 82.5% and 7.4%, respectively.

Business Highlights

In 2018, the global economic recovery has been slow while China maintained a broadly stable economic performance with GDP up 6.6%. International oil prices have fluctuated in a wide range. Domestic demand for natural gas has increased rapidly. The domestic market for petroleum products has been fiercely competitive due to oversupply, and demand for chemicals has increased steadily. Meanwhile, From China environmental regulations have become stricter. The company has actively coped with market changes by focusing on reform, management, innovation and development. We have coordinated all aspects of our work by advocating measures to optimize operation, market expansion, cost reduction, risk control, the promotion of reforms and the application of management rules, which have enabled the company to achieve strong operating results.

• Exploration and Production Sector: Continued high-efficiency exploration and for-profit development, constant reduction of costs and expenditures at all levels. Tangible results have been achieved by maintaining oil production, increasing gas production and reducing costs. We have strengthened preliminary exploration in new areas and strengthened integrated detailed badessment in mature fields, which has led to new discoveries in Tarim, Yin & # 39; e and Sichuan basins. In the development of natural gas, we have consistently advanced capacity building in Hangjinqi, Neimongol, the eastern slope of shale gas fields of the Sichuan and Weirong Depression. We optimized production and distribution and promoted coordinated growth along the value chain.
• Refining sector: the continuously optimized product range and the volume of production of high added value products have further increased. We proactively promoted structural adjustment and quality improvement projects. The upgrading of the GB VI standard has been completed. Optimization of production plans and allocation of resources were made to reduce the cost of crude oil.
• Marketing and Distribution Sector: aims to achieve a balance between sales volume and profits; We fully exploited our integrated distribution and distribution network advantages and faced fierce competition in the market. As a result, we saw sustained growth in total domestic sales volume and the retail sales scale. Non-fuel activities maintained rapid growth.
• Chemicals sector: adhered to the 'higher-end basic' development philosophy aimed at improving the efficiency of supply; intensified its efforts to improve the efficiency of integration between production, marketing, R & D and applications. The proportion of synthetic products with high added value has continued to increase. The total volume of chemical sales grew strongly.

Mr. Dai Houliang, President of Sinopec Corp., said, "In 2018, we have embraced the overarching principle of moving forward while maintaining stability, while respecting the new development philosophy and high development requirements. We have fully exploited the benefits of integrated technology and have worked hard to optimize operations, expand the market, reduce costs, control risks, deepen reforms, strengthen management and launch the Talent Empowering Enterprise program. We have constantly improved the quality of the company's development by optimizing production and operations, actively developing markets, accelerating structural adjustments and promoting scientific and technological innovations, thus strengthening our competitiveness. to the overall strategy of continuing progress while to achieve stability, to fulfill our responsibilities and to put more effort into implementing our plans to lay a solid foundation for sustainable development. Careful planning will be done to ensure stable operation and improve operational quality and profitability. In addition, we will strive to implement the reform and improve the mechanisms of motivation and incentive. Foundation will be consolidated, risk control will be strengthened and operating and management standards will be further enhanced. In addition, we will strongly encourage technology innovation to drive future growth. We advance structural reform by establishing a strong resource base for sustainable development, strengthening the overall competitiveness of the refining and marketing value chain and strengthening our capacity for high-end production and value creation for the chemistry sector. In order to make the company a high quality green company, we will make sustained efforts in pollution prevention and environmental protection to raise the level of our green development. In addition, we will explore and seize strategic emerging business opportunities through financial investments, developing new growth drivers. "

Activity Report

Exploration and production

In 2018, we continued high-efficiency exploration and profit-oriented development. Steps have been taken to accelerate the formation of an integrated value chain of natural gas activities, including production, supply, storage and marketing, and to permanently reduce costs and expenditures on all plans. Tangible results have been achieved by maintaining oil production, increasing gas production and reducing costs. We have strengthened preliminary exploration in new areas and strengthened integrated detailed badessment in mature fields, which has led to new discoveries in Tarim, Yin & # 39; e and Sichuan basins. The newly proven proven reserves of the company in China 458.2 million barrels (64.54 million tonnes) of oil equivalent, with a crude oil reserve replacement rate of 131.7%. With respect to the development of crude oil, we have made considerable efforts to create a profitable production capacity, deepen the structural adjustment of mature fields, reduce the rate of natural degradation and ensure stable production. In the development of natural gas, we have consistently advanced capacity building in Hangjinqi, Neimongol, the eastern slope of shale gas fields of the Sichuan and Weirong Depression. We optimized production and distribution and promoted coordinated growth along the value chain. The company's oil and gas production reached 451.46 million barrels (63.50 million tons) of oil equivalent, domestic crude oil production reached 248.93 million barrels (35.06 million tonnes) and natural gas production reached 977.32 billion cubic feet (27.7 billion cubic meters), up. 7.1%.

In 2018, revenues from this segment were RMB 200.2 billion, up 27.1% from 2017. This increase is mainly due to higher realized prices for crude oil and natural gas and the expansion of natural gas and LNG operations. Taking into account the recovery of the price of crude oil, the sector has enhanced the efficiency of exploration, optimized the profitable production of refined deposits, promoted stable production of crude oil and rapidly increased gas production. natural. Operating losses in the exploration and production sector were 10.1 billion RMB, representing a significant reduction in the loss of 35.8 billion RMB compared to 2017.

Exploration and production: summary of operations

Refining

In 2018, thanks to our market-oriented approach, we have optimized our product line to produce more gasoline, jet fuel and raw materials for chemicals, to increase the production of high-grade products. added value and reduce the diesel / petrol ratio to 1.06. We proactively promoted structural adjustment and quality improvement projects. The upgrading of the GB VI standard has been completed. We have moderately increased exports of petroleum products to maintain a relatively high utilization rate. The optimization of resource allocation was carried out to reduce the costs of crude oil. In 2018, the Company processed 244 million tonnes of crude oil, up 2.3%, and produced 155 million tonnes of refined petroleum products, up 2.7%, with gasoline up 7, 2% and kerosene 7.6%.

In 2018, revenues from this segment were RMB 1,263.4 billionThis represents an increase of 24.9% over 2017. This increase is mainly due to higher product prices, as well as the Company's efforts to increase refinery throughput and increase sales volumes. Segment operating profit was 54.8 billion RMB.

Refining: summary of operations

Note: Includes 100% of the production of national joint ventures.

Marketing and distribution

In 2018, faced with fierce competition in the market, the company aimed to achieve a balance between sales volume and profits. We fully exploited our integrated distribution and distribution network advantages and intensified our marketing efforts to achieve sustained growth in total domestic sales volume and retail scale. We have adopted a flexible and targeted marketing strategy and upgraded our distribution network to reinforce our existing benefits. We have proactively promoted activities related to natural gas for vehicles and accelerated the construction and operation of CNG stations. The total volume of sales of refined petroleum products for the year was 198 million tonnes, of which 180 million tonnes was domestically produced. At the same time, we strengthened the development and commercialization of our own brands to accelerate the growth of non-fuel businesses.

In 2018, revenues from this segment were RMB 1,446.6 billion, which represents an increase of 18.2% compared to 2017. The operating result of this sector RMB 23.5 billion.

Marketing and Distribution: Summary of Operations

Chemical products

In 2018, the company adhered to the 'higher-end basic' development philosophy aimed at improving the efficiency of supply. We have constantly refined the mix of chemical raw materials to reduce costs. We optimized slate products and increased the production of high-end products. The proportion of new synthetic resin products and specialties reached 64.3%, the proportion of high value added synthetic rubber products was 26.3% and our synthetic fiber differential ratio reached 90.4%. By optimizing the utilization rate and the production plan according to the market demand, we have improved the functioning of the chemical units. To strengthen the structural adjustment of capabilities, we have actively promoted several key projects. The annual production of ethylene was 11.51 million tons. The company has also intensified its efforts to improve the efficiency of the integration of production, marketing, research and development and applications, as well as to promote targeted marketing and services in order to develop his activity. The total volume of chemical sales increased by 10.3% to 86.6 million tonnes. hit a record.

In 2018, revenues from the chemicals sector were RMB 546.7 billionrepresents an increase of 24.9% over 2017, primarily due to increased sales volume and the price of chemicals resulting from the Company's efforts to actively increase sales volume and market share, optimizing the product range. In 2018, the industry seized the opportunities offered by a high chemical margin, continuously optimized the structures of raw materials, products and facilities, strengthened coordination between research, development, production and marketing, intensified the The allocation of resources, improved the targeted marketing strategy and achieved remarkable profits. with the increase in sales volume of petrochemical products. In 2018, the operating profit for this segment was RMB 27.0 billion.

Note: Includes 100% of the production of national joint ventures.

Research and development

In 2018, with a focus on strengthening the strategy focused on innovation, the company achieved notable results in R & D, deepened the reform of the R & D mechanism and continued its efforts in key and advanced technologies. In the upstream segment, technological advances in the evaluation of buried bedrock and deep carbonate reservoir as well as fracturing technology of the shale gas deposit in depth have allowed a decisive advance in the development of the basement. exploration of the Guaizihu Depression in the Yin Basin and new series of layers in the Maokou Formation in the Yuanba area as well as the discovery of the Weirong Deep Shale Gas Deposit. The high temperature 185 ° C pilot test during drilling was successfully conducted in the Shunbei ultra deep well. In refining, we realized the industrialization of technologies, including the new alkylation of sulfuric acid and hydro-isomerization dewaxing for the production of high quality base oil. In the chemical sector, HPPO's industrial demonstration unit has become stable and new products such as PE film have been turned into commercial production. In addition, SOR, the structural type code of a new structured zeolite that we synthesized, was approved by the Structure Commission of the International Zeolite Association, making us the first Chinese company to achieve a breakthrough in this domain. In 2018, the Company had 6,074 patents domestically and internationally, of which 4,434 were issued. The company also won a second National Technology Invention award and three other National Sci-tech Progress awards, four silver medals and four excellent National Patent Awards.

Health, Safety, Security and Environment

In 2018, the company has consistently promoted HSSE management. We have implemented the concept of "global health" by integrating the management of occupational, physical and mental health of our employees. The company has taken strict measures to control risks and oversee the safety and activities of subcontractors. We have also strengthened safety measures at all levels, eliminating potential hazards and strengthening our emergency response capacity through sound and reliable production and operation. The public safety management capacity has been strengthened with the improvement of risk badessment, surveillance, early warning and emergency response mechanisms. The Green and Low Carbon Growth strategy has also been implemented by promoting clean energy and green development, for example by continuing to advance our green business campaign and our plan to duplicate green energy. efficiency. We have achieved all emission reduction objectives by seeking clean production and preventing pollution.

Capital expenditures

In 2018, focused on the quality and profitability of investments, the Company has continuously optimized its investment projects. 118 billion RMB. Capital expenditures for the exploration and production sector were RMB 42.2 billion, mainly for the Fuling and Weirong shale gas development projects, the Hangjinqi natural gas development project, the Shengli and North West crude oil development projects, the Xinjiang pipeline Phase I, and the Erdos pipeline Phase I pipeline. -Anping-Cangzhou, Wen 23 and Jintan gas storage facilities, as well as projects abroad. Capital expenditures for the refining sector have been RMB 27.9 billion, mainly for the Zhongke Refining and Petrochemical Project, Zhenhai, Tianjin, The Maoming and Luoyang refineries, the gasoline and diesel quality improvement projects GB VI and the construction of the Rizhao-Puyang-Luoyang crude oil pipeline. Capital expenditures for the marketing and distribution segment were RMB 21.4 billion, mainly for the construction of petroleum products depots, oil pipelines, service stations, non-fuel-related activities and the renovation of underground oil tanks to eliminate potential risks to safety. Capital expenditures for the chemicals sector were RMB 19.6 billion, mainly for ethylene projects in Zhongke, Zhenhai and Gulei, Phase II of Hainan project of high efficiency and environmentally friendly aromatic products, Sinopec-SABIC polycarbonate project and Zhongan coal chemical project. Capital expenditures for businesses and others have been RMB 6.9 billion, mainly for the formation of Sinopec Capital Company's joint venture with the Sinopec group, R & D facilities and IT projects.

Bbusiness prospects

By 2019, the international economy is expected to grow at a slower pace in the midst of a complex and uncertain global political and economic environment. Meanwhile, growth continues to From China The economy will further boost domestic demand for refined petroleum products and high-end petrochemicals. As the adjustment of From China as the energy mix deepens, demand for natural gas will continue to grow at a steady pace. Given the uncertainties over the supply capacity of major oil producing countries, global oil demand and geopolitical issues, etc., the international price of oil should fluctuate over a wide range.

Operations In 2019, adhering to the general principle of seeking progress while maintaining stability, to the new development philosophy and operational guidelines of "specialized development, market-based operation, internationalization and internationalization". general coordination ". The following activities will be prioritized during the year.

Exploration and production, By fully implementing the plan of action to redouble efforts in the exploration and production of oil and gas, we will advance the high-efficiency exploration, will continuously increase proven reserves and expand the resource base. In the development of crude oil, further efforts will be made to promote the capacity building of the Tahe oilfield, by making a technological breakthrough for undeveloped oil reservoirs, by improving the characterization of refined reservoirs in mature deposits in order to improve oil production. 39 increase the rate of development and recovery of reserves. In the development of natural gas, we will accelerate the construction of key project capacity, optimize the natural gas production, supply, storage and marketing system as well as the market structure to foster the coordinated development of natural gas. the entire value chain of the company. In 2019, we expect to produce 288 million barrels (40.48 million tonnes) of crude oil, of which 39 million overseas (5.41 million tonnes) and 1,019.1 billion cubic feet ( 28.9 billion cubic meters) of natural gas.

Refining, Through integrated planning, we will optimize crude oil allocation, strengthen inventory management and advance the high-efficiency operation of the refinery value chain. Maintenance will be organized according to market developments, so as to maximize the overall benefit. We will further optimize the product line by reducing the diesel / gas ratio and increasing the production of gasoline, jet fuel and light chemicals. The upgrade plan for the quality of the new marine fuel oil will be implemented to increase the rate of capacity utilization. Marketing mechanisms will be improved to increase the total trade volume of other refined petroleum products. In 2019, we plan to process 246 million tonnes of crude oil and produce 157 million tonnes of refined petroleum products.

Marketing and distribution, By emphasizing the marketing strategy of balancing profits and sales volume, we will continue to optimize the allocation of resources, expand the market and increase profitability. ; operating. We will implement targeted and differentiated marketing with our customers in order to constantly improve the quality of service. The marketing and distribution network will be further enhanced to amplify existing benefits. We will accelerate the construction and operation of natural gas stations and expand the natural gas market for automobiles. Substantial progress will be made in the hydrogen refueling stations and the battery charging and exchange stations. We will explore the new "Internet + Service Stations + Convenience + Full Service" mode of operation to advance the development and commercialization of clean brands and to advance non-fuel business growth. In 2019, we plan to sell 182 million tonnes of refined petroleum products domestically.

Chemical products, we will further adjust the composition of raw materials, the product range and the structure of the facilities in order to constantly improve competitiveness. Continuous optimization of the composition of raw materials will diversify supply channels for raw materials and reduce costs. Additional efforts will be made to adjust the product line and coordinate production, marketing, research and application to increase the proportion of high-end products. We will improve the dynamic optimization of the facilities and the product chain and improve the planning of the use and production according to the market demand. We will strengthen the market badysis to actively expand the market, thereby increasing market share. Meanwhile, the benefits of growing and building production capacity will be accelerated to produce high-end products and create more value. By 2019, we plan to produce 12.12 million tons of ethylene.

Research and development, we will continue to fully implement the innovation-driven development strategy, deepen the reform of science and technology systems, accelerate key technological breakthroughs, advance exploratory research on advanced technologies and intensify the commercial application of technological achievements in order to fight for sustainable development in a global way. With a focus on ever-changing oil and gas exploration and production technologies, we will focus on achieving breakthroughs in oil and gas exploration, production and appraisal technologies. En ce qui concerne le raffinage, des efforts supplémentaires seront consentis pour progresser dans les technologies d’amélioration de la qualité des produits pétroliers raffinés, le développement technologique des produits pétroliers raffinés auto-détenus et le renforcement de la recherche sur la technologie d’optimisation du procédé global des raffineries. Dans le secteur des produits chimiques, nous continuerons d’améliorer le système technologique des produits chimiques et de renforcer le développement de nouveaux matériaux à haute valeur ajoutée. Les avancées technologiques en matière de sécurité et de protection de l'environnement seront intensifiées. Parallèlement, des recherches fondamentales et prospectives seront menées dans des domaines aussi novateurs que nouveaux, notamment les nouvelles énergies, les nouveaux matériaux, l’intelligence artificielle et les technologies à faibles émissions de carbone, afin de stimuler l’innovation.

Dépenses en immobilisations en 2019, nous nous concentrerons davantage sur la qualité et la rentabilité des investissements grâce à une optimisation constante des projets d'investissement. Les dépenses en immobilisations de l’exercice sont budgétisées à 136,3 milliards de RMB. Dont 59,6 milliards de RMB seront investis dans l’exploration et la production en mettant l’accent sur le renforcement des capacités de production des champs pétrolifères de Shengli, Northwest Oilfield et de Leikou, dans l’ouest Sichuan, Le gisement de gaz de schiste Fuling et le gisement de schiste de Weirong, ainsi que la construction d’oléoducs et d’installations de stockage de gaz naturel, ainsi que de projets pétroliers et gaziers à l’étranger. Les dépenses en capital pour le raffinage s'élèveront à 27,9 milliards de RMB qui seront consacrés à la construction des projets Zhongke et Zhenhai et au raffinage des projets d’ajustement structurel de Tianjin, Maoming, Luoyang, Wuhan, Beihai et Yangzi. 21,8 milliards de RMB sont budgétisés pour la commercialisation et la distribution, en mettant l’accent sur la construction de dépôts et d’installations de stockage pour les produits pétroliers raffinés, les oléoducs et les stations-service, le développement des activités non pétrolières et la rénovation des réservoirs de stockage souterrains. La part des produits chimiques sera 23,3 milliards de RMB qui sera utilisé sur Zhongke, Zhenhai, Gulei, Hainan and Wuhan, des projets de chimie du charbon de Bijie et de Zhongan, ainsi que des projets complets d’utilisation des ressources et d’ajustement structurel du Yangzi et de la SSTPC. Les dépenses en capital pour les entreprises et les autres atteindront 3,7 milliards de RMB, principalement pour les installations de R & D et les projets informatiques.

Annexe: Key données financières et indicateurs

DONNÉES FINANCIÈRES ET INDICATEURS PRÉPARÉS SELON ASBE

Principales données comptables

Principaux indicateurs financiers

DONNÉES FINANCIÈRES ET INDICATEURS PRÉPARÉS CONFORMÉMENT AUX IFRS

Principales données comptables

Principaux indicateurs financiers

Le tableau suivant présente les produits d’exploitation, les charges d’exploitation et le résultat d’exploitation de chaque secteur avant élimination des transactions intersectorielles pour les périodes indiquées, ainsi que les variations en pourcentage entre 2018 et 2017.

À propos de Sinopec Corp.
Sinopec Corp. est l’une des plus grandes sociétés énergétiques et chimiques intégrées du China. Ses principales activités comprennent l’exploration et la production, le transport par pipeline et la vente de pétrole et de gaz naturel; la vente, le stockage et le transport de produits pétroliers, de produits pétrochimiques, de produits chimiques dérivés du charbon, de fibres synthétiques, d’engrais et d’autres produits chimiques; l'importation et l'exportation, y compris les activités d'une agence d'importation et d'exportation, de pétrole, de gaz naturel, de produits pétroliers, de produits pétrochimiques et chimiques, ainsi que d'autres produits et technologies; et recherche, développement et application de technologies et d'informations.

Sinopec a pour mission d’alimenter une belle vie, en mettant en avant les valeurs fondamentales de son personnel: «Les gens, la responsabilité, l’intégrité, la précision, l’innovation et le gagnant-gagnant». open cooperation, and green and low-carbon growth, and strives to achieve its corporate vision of building a world leading energy and chemical company.

Warning
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