Sinopec's Net Profit for First Three Quarters 2021 Reached RMB 60.755 Billion; Achieved Good performance in Operation and Profitability
October 28, 2021 at 08:30 AM EDT
HONG KONG, CHINA / ACCESSWIRE / October 28, 2021 / China Petroleum & Chemical Corporation ("Sinopec Corp." or the "Company") (HKEX:00386; SSE: 600028; NYSE:SNP)today announced its unaudited results for the nine months ended 30 September 2021.
In the first three quarters of 2021, as the world economy gradually picked up, China's economy kept a sustainable and steady recovery, registering a GDP growth of 9.8% year-on-year among which up by 4.9% in the third quarter. In the first three quarters the average spot price of Platts Brent was USD67.73 per barrel, up by 65.9% year-on-year. Domestic demand for natural gas continued to grow rapidly, with an apparent consumption up by 16.6% year-on-year. Domestic demand for refined oil products recovered steadily and demand for major chemicals sustainedstable.
Confronted with the environment where the international oil price went up and the demand for petrochemical products recovered steadily, the Company stressed on improving our systems, expanding markets, and controlling costs, thus realising outstanding operation results.
Exploration and Production: The Company seized the favourable opportunity of rising oil prices, pressed ahead with high-quality exploration and profit-oriented development, strengthened the foundation of resources. In terms of exploration, we strengthened risk exploration in new regions and new sectors, which led to new discoveries in Tarim Basin, Sichuan Basin, and Erdos Basin, and major breakthroughs in continental facies shale oilfields of Bohai Bay Basin, Sichuan Basin, and North Jiangsu Basin. In terms of production, we efficiently proceeded with the capacity building of major natural gas and crude oil projects, and the natural gas production increased by 13.7% year-on-year and the crude oil production kept stable. The exploration and production segment realised earnings before interest and taxes (EBIT) of RMB 10.904 billion in the first three quarters.
Conversion: For domestic production of crude oil, 1 tonne = 7.10 barrels. For overseas production of crude oil, 1 tonne = 7.21 barrels. For production of natural gas, 1 cubic meter = 35.31 cubic feet.
Refining: The Company actively responded to market changes, strengthened integration of refining and marketing, raised processing volume, kept high utilisation rate, actively adjusted product slate and maximised profits along the industrial chain. We optimised crude oil allocation and cut procurement costs. We insisted on the strategy of shifting from oil to chemicals, lowered refined oil products yield, and increased production of readily marketable products like gasoline and light chemical feedstock. We increased production of high value-added products and specialty products, built 6 sets of hydrogen purification units, developed high-end needle-shaped coke products and domestic market share of low-sulphur bunker fuel ranked the first. We expedited advanced capacity building and pushed ahead with restructuring projects. In the first three quarters of 2021, the Company processed 191 million tonnes of crude oil, up by 9.3% year-on-year, and produced 109 million tonnes of refined oil products, up by 3.2% year-on-year. The refining segment realised EBIT of RMB 54.268 billion in the first three quarters.
Marketing and Distribution: The Company leveraged our advantages of integration of refining and marketing to expand markets and adopted targeted marketing strategy, resulting in an elevation of scale. We consolidated our resources of customers and marketing throughout the country, and continuously improved the quality of our services. We optimised the network layout to reach end users, accelerated the construction of integrated energy service stations offering petrol, gas, hydrogen, power, and non-fuel services, and put our first carbon-neutral station and BIPV (building integrated photo-voltaic) station into operation. In the first three quarters, total sales volume of refined oil products was 166.59 million tonnes, among which total domestic sales volume of refined oil products was 127.88 million tonnes, up by 3.8% year-on-year. The Company strengthened the development and marketing of company-owned brands, actively explored emerging business models such as car services, fast food, and advertising, and speed up the development of non-fuel businesses. The marketing and distribution segment realised EBIT of RMB 24.316 billion in the first three quarters.
Chemicals: By adhering to "following the market and centering on profits", the Company sped up the advanced capacity building and structural adjustment. We fine-tuned chemical feedstock to reduce costs; we adjusted the structure of the facilities and optimised maintenance schedule to raise the utilisation of profitable facilities; we enhanced integration of production, marketing and research and continuously increased the ratio of high value-added products, raising the ratio of synthetic resin, synthetic rubber, and synthetic fibre by 1.4, 3.7 and 1.6 percentage points respectively year-on-year. In the first three quarters, ethylene production reached 9.75 million tonnes, up by 10.2% year-on-year. Meanwhile, we scored achievements in key clients management, scaled up profit generation through exports, and launched self-marketing products on e-commerce. The total sales volume of chemical products for the first three quarters was 60.77 million tonnes. The chemicals segment realised EBIT of RMB 23.064 billion in the first three quarters.
Note : Including 100% production of domestic joint ventures.
Capital expenditure: Focusing on investment quality and profitability, the Company optimised its investment management system, with total capital expenditures of RMB89.7 billion in the first three quarters of 2021. The capital expenditure for exploration and production segment was RMB38.6 billion, mainly for the capacity building of Shunbei oilfield, Weirong, Fuling, and Western Sichuan natural gas projects, and the construction of storage and transportation facilities for phase II of Tianjin LNG project, etc. The capital expenditure for the refining segment was RMB10.6 billion, mainly for the refining structural upgrading projects in Zhenhai and Anqing, and construction of hydrogen purification project, etc. The capital expenditure for the marketing and distribution segment was RMB9.9 billion, mainly for building oil (gas) stations, integrated energy service stations offering petrol, gas, hydrogen, power, and services and logistics facilities, etc. The capital expenditure for the chemicals segment was RMB29.7 billion, mainly for Zhenhai, Sino-Korea, and Hainan ethylene projects, the overseas AGCC project, Jiujiang Aromatics project, Yizheng PTA project, etc. The capital expenditure for corporate and others was RMB900 million, mainly for R&D facilities and information technology projects, etc.
Appendix: Principal financial data and indicators
Note: The Company has completed the formation of Sinopec Baling Petrochemical Co. Ltd on 1 November 2020, and has completed the purchase of non-equity assets of Beihai Petrochemical Limited Liability Company of Sinopec Group, Cangzhou branch of Sinopec Group Asset Management Co., Ltd and Beijing Orient Petrochemical Industry Co., Ltd on 1 July 2021. The business reorganisation and transactions have been accounted as business combination under common control. Accordingly, the Company has retrospectively adjusted the relevant financial data.
Principal financial data and indicators prepared in accordance with IFRS
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.
Sinopec sets 'fueling beautiful life' as its corporate mission, puts 'people, responsibility, integrity, precision, innovation and win-win' as its corporate core values, pursues strategies of value-orientation, innovation-driven development, integrated resource allocation, open cooperation, and green and low-carbon growth, and strives to achieve its corporate vision of building a world leading energy and chemical company.
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.
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SOURCE: China Petroleum & Chemical Corporation
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