EQS Newswire / 28/10/2022 / 17:29 UTC+8
(For immediate release)
Sinopec Achieved Good Performance for the First Three Quarters of 2022
(28 October 2022, Hong Kong, China) China Petroleum & Chemical Corporation (“Sinopec Corp.” or the “Company”) (HKEX: 00386; SSE: 600028) today announced its unaudited results for the nine months ended 30 September 2022.
In the first three quarters of 2022, the world economic growth slowed down. As China effectively coordinated pandemic prevention and control with economic and social development, domestic economy stabilized and resumed growth momentum in the third quarter with the GDP grew by 3.9% year-on-year. International crude oil prices rose sharply and fluctuated in the first three quarters and then spiralled down in the third quarter. The average spot price of Platts Brent was USD102.5 per barrel, up by 50.8% year-on-year. Domestic demand for natural gas remained stable. According to the Company’s statistics, domestic demand for refined oil products shrank in the first half of this year and then bounced back with a growth rate of 1.5% year-on-year in the third quarter. Meanwhile, demand for major chemical products was weak due to high crude oil price and the pandemic, leading to a contraction in profit margin. The ethylene equivalent consumption decreased by 1.0% year-on-year in the first three quarters.
In the face of severe and complex environment of production and operation, the Company took full advantages of its integrated industrial chain, actively responded to market changes, deepened the optimization of entire industrial chain, enhanced production and marketing coordination, and achieved high-quality operating results.
Exploration and Production: The Company seized the favourable opportunities from high oil prices to intensify efforts in exploration and development, consolidated the resource base, improved operational performance, and realised growth in production and profit. In terms of exploration, the Company stepped up venture exploration and trap preliminary exploration in new regions and areas, and achieved a number of oil and gas discoveries, including breakthroughs in the Shunbei oil and gas fields located in Tarim Basin, the shale oilfields in Bohai Bay Basin and Subei Basin, the ultra-deep natural gas exploration in Sichuan Basin. In terms of development, the Company accelerated the capacity expansion of major oilfields, such as those in Shunbei, Tahe and offshore blocks. It enhanced the efficiency of mature oil fields and fine-tuned their development. It also actively expanded the capacity of key natural gas blocks in Shunbei and Sichuan basins, and further optimized the entire natural gas business chain and improved its profitability. In the first three quarters of 2022, the Company’s oil and gas production reached 363.18 million barrels of oil equivalent, up by 2.3% year-on-year. Crude oil production reached 210.82 million barrels, up by 1.0% year-on-year and natural gas production reached 913.8 billion cubic feet, up by 4.1% year-on-year. The exploration and production segment realised earnings before interest and tax (EBIT) of RMB 46.245 billion in the first three quarters.
Conversion: For domestic production of crude oil, 1 tonne = 7.1 barrels. For overseas production of crude oil, 1 tonne = 7.05 barrels. For production of natural gas, 1 cubic meter = 35.31 cubic feet.
Refining: The Company actively dealt with the challenges brought by high crude oil price and the pandemic, insisted on the integration and optimization of production and marketing, leveraged the adaptability of its facilities to maintain their stable operation. It flexibly adjusted the utilization rate of facilities, the product slate and the pace of export in accordance with the market conditions and reduced the inventory level. It optimized the pace of crude oil procurement and resources allocation to reduce procurement costs. Continuing efforts were made to shift the production of refined oil products to the production of chemicals and specialty products. It accelerated construction of advanced capacity, promoted structural adjustment projects in an orderly manner and expedited the hydrogen supply projects. In the first three quarters of 2022, the Company processed 180 million tonnes of crude oil, down by 5.6% year-on-year. The output of refined oil products was 103 million tonnes, of which the diesel output increased by 4.7% year-on-year. The refining segment realised EBIT of RMB 20.645 billion in the first three quarters.
Marketing and Distribution: In the face of unfavourable situation arising from sporadic COVID-19 outbreaks in different regions, the Company strengthened the integration of production and marketing, scientifically adjusted business strategy and dynamically optimized the resources allocation. Specifically, it seized the favorable opportunity resulting from the gradual recovery of demand and continuous standardization of market order in the third quarter to vigorously boost sales and profitability. The Company actively expanded low-sulphur bunker fuel operation, reinforced its market position, expanded the business scope, enhanced its brand power and improved the quality and profitability of non-fuel business. Efforts were made to accelerate sales network development, digitisation and its transformation into an integrated energy service provider of petrol, gas, hydrogen, power and services. In the first three quarters, domestic sales volume of refined oil products was 121.99 million tonnes, of which the sales volume for the third quarter was 43.53 million tonnes, up by 16.4% quarter-on-quarter. The marketing and distribution segment realised EBIT of RMB 23.154 billion in the first three quarters.
Chemicals: In the face of difficulty situation arising from high cost, high inventory and low margin in domestic chemical industrial chain, the Company closely monitored the changes in market demand, dynamically optimized the feedstock structure and the product mix, optimized utilization rate of facilities according to the profitability of different products, maintained high utilization rate in profitable facilities, and increased the production of EVA and BR. As a result, both of the production and profit of coal chemical business improved. The Company comprehensively enhanced the capacity of facilities in Zhenhai, Nangang of Tianjin, Hainan and Jiujiang. In the first three quarters, ethylene production reached 10 million tonnes, up by 2.6% year-on-year. It made relentless efforts to ensure sufficient supply to strategic customers, actively increased exports, and vigorously expanded into high-end markets. In the first three quarters, the total sales volume of chemical products was 60.40 million tonnes, representing a slight decrease year-on-year. Due to a sharp decline in gross profit margin of chemical products, the chemicals segment realised EBIT of RMB -1.061 billion in the first three quarters.
Note : Including 100% production of domestic joint ventures.
Capital expenditure: Capital expenditures in the first three quarters were RMB 104.0 billion, of which RMB 51.6 billion was spent in E&P segment, mainly for the crude oil capacity building in Shunbei and Tahe, natural gas capacity building in Chuanxi and Dongsheng, and the construction of storage and transportation facilities such as the relocation of Dongying crude oil depot and Longkou LNG projects; RMB 13.6 billion was spent in refining segment, mainly for Anqing and Yangzi refining upgrading projects and the phase two of Zhenhai refining and chemical projects; RMB 6.5 billion was spent in marketing and distribution segment, mainly for the upgrading of existing stations and construction of integrated energy stations integrating gasoline, gas, hydrogen, power and services, as well as logistics facilities; RMB 29.5 billion was spent in chemicals segment, mainly for Hainan and the Nangang ethylene projects in Tianjin, Jiujiang aromatics project, Zhenhai refining and chemical project phase II and Yizheng PTA project; RMB 2.8 billion was spent in corporate and others, mainly for construction of science and technology research and IT projects.
Appendix: Principal financial data and indicators
Principal financial data and indicators prepared in accordance with CASs
Note: The Company has completed the purchase of non-equity assets and liabilities of Sinopec Group Asset Management Co., Ltd. and Sinopec Beijing Yanshan Petrochemical Co., Ltd. on 1 December 2021. Sinopec Yizheng Chemical Fibre Company Limited, a subsidiary of Sinopec Corp., has completed the purchase of non-equity assets and liabilities of Sinopec Group Asset Management Co., Ltd. on 1 December 2021. The transactions described above have been accounted as business combination under common control, thus, the Company retroactively 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 production, sale, storage and transportation of refinery products, petrochemical products, coal chemical products, synthetic fibre, 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; hydrogen energy business and related services such as hydrogen production, storage, transportation and sales; battery charging and swapping, solar energy, wind energy and other new energy business and related services.
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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28/10/2022 Dissemination of a Marketing Press Release, transmitted by EQS News.
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