REG - China Pet &Chem Corp - 1st Quarter Results
China Petroleum & Chemical Corporation
The First Quarterly Report for 2021
28 April 2021
Beijing, China
1 Important notice
1.1 The Board of Directors, the Board of Supervisors of China Petroleum & Chemical Corporation ("Sinopec Corp." or "the Company") and its directors, supervisors and senior management warrant that there are no false representations, misleading statements or material omissions contained in this report and severally and jointly accept full responsibility for the authenticity, accuracy and completeness of the information contained in this report.
1.2 The first quarterly report for 2021 was approved at the 22th meeting of the Seventh Session of the Board of Directors of Sinopec Corp. All directors attended this meeting.
1.3 Mr. Zhang Yuzhuo, Chairman, Mr. Ma Yongsheng, President, Ms. Shou Donghua, Chief Financial Officer and Head of the Financial Department of Sinopec Corp. warrant the authenticity, accuracy and completeness of the financial statements contained in this quarterly report.
1.4 The financial statements in this quarterly report were not audited.
2 Basic information of Sinopec Corp.
2.1 Principal financial data and indicators
2.1.1 Principal financial data and indicators prepared in accordance with China Accounting Standards for Business Enterprises (CASs)
RMB million
Items
As of 31
March 2021
As of 31 December 2020
Changes from the end of the preceding year to the end of the reporting period (%)
Total assets
1,802,144
1,733,805
3.9
Total equity attributable to equity shareholders of the Company
764,675
742,463
3.0
Three-month period ended 31 March 2021
Three-month period
ended 31 March
2020 (adjusted)
Three-month period ended 31 March 2020
(before adjustment)
Changes over the same period of preceding year(%)
Net cash flow from operating activities
(15,578)
(67,970)
(68,125)
-
Operating income
576,982
554,482
555,502
4.1
Net profit/ (loss) attributable to equity shareholders of the Company
17,929
(19,866)
(19,782)
-
Net profit/ (loss) attributable to equity shareholders of the Company excluding extraordinary gains and losses
17,674
(20,440)
(20,444)
-
Weighted average return on net assets(%)
2.38
(2.73)
(2.73)
5.11
percentage points
Basic earnings per share
(RMB)
0.148
(0.164)
(0.163)
-
Diluted earnings per share
(RMB)
0.148
(0.164)
(0.163)
-
Note: The Company has completed the formation of Sinopec Baling Petrochemical Co. Ltd in 2020. The transaction described above has been accounted as business combination under common control, thus, the Company retroactively adjusted the relevant financial data of the first quarter of 2020.
Extraordinary items
During the reporting period
(income)/expenses（RMB million）
Net gain on disposal of non-current assets
(164)
Donations
2
Government grants
(636)
Gains on holding and disposal of various investments
(108)
Other extraordinary income and expenses, net
458
Subtotal
(448)
Tax effect
134
Total
(314)
Attributable to:
Equity shareholders of the Company
(255)
Minority interests
(59)
2.1.2 Principal financial data and indicators prepared in accordance with International Financial Reporting Standards (IFRS)
RMB million
Items
As of 31
March 2021
As of 31 December 2020
Changes from the end of the preceding year to the end of the reporting period (%)
Total assets
1,802,144
1,733,805
3.9
Total equity attributable to shareholders of the Company
763,717
741,494
3.0
RMB: million
Three-month period ended 31March
2021
Three-month period ended 31 March
2020
(adjusted)
Three-month period ended 31 March
2020
(before adjustment)
Changes over the same period of the preceding year（%）
Net cash generated from operating activities
(15,578)
(67,970)
(68,125)
-
Operating profit/ (loss)
28,701
(26,433)
(26,305)
-
Net profit/ (loss) attributable to shareholders of the Company
18,543
(19,229)
(19,145)
-
Basic earnings per share (RMB)
0.153
(0.159)
(0.158)
-
Diluted earnings per share (RMB)
0.153
(0.159)
(0.158)
-
Return on net assets (%)
2.43
(2.70)
(2.69)
5.13
percentage points
Note: The Company has completed the formation of Sinopec Baling Petrochemical Co. Ltd in 2020. The transaction described above has been accounted as business combination under common control, thus, the Company retroactively adjusted the relevant financial data of the first quarter of 2020.
2.2 Total number of shareholders and top ten shareholders at the end of the reporting period
Total number of shareholders at the end of the reporting period
Total number of shareholders was 517,008, including 511,331 holders of domestic A shares and 5,677 holders of overseas H shares.
Top ten shareholders
Name of shareholder
Total number of shares held
Percentage
(%)
Number of shares subject to pledge or lock-ups
Nature of shareholder
China Petrochemical Corporation
82,709,227,393
68.31
0
State-owned share
HKSCC (Nominees) Limited
25,385,219,245
20.97
Unknown
H share
中国证券金融股份有限公司
2,325,374,407
1.92
0
A share
香港中央结算有限公司
1,049,467,290
0.87
0
A share
中国人寿保险股份有限公司－传统－普通保险产品－005L－CT001沪
813,500,331
0.67
0
A share
中国人寿保险股份有限公司－分红－个人分红－005L－FH002沪
632,058,605
0.52
0
A share
中央汇金资产管理有限责任公司
322,037,900
0.27
0
A share
全国社保基金一一三组合
107,980,897
0.09
0
A share
阿布达比投资局
101,128,826
0.08
0
A share
基本养老保险基金八零二组合
81,496,100
0.07
0
A share
Note Sinopec Century Bright Capital Investment Limited, overseas wholly-owned subsidiary of China Petrochemical Corporation, holds 553,150,000 H shares, which is included in the total number of the shares held by HKSCC (Nominees) Limited.
Statement on the connected relationship or acting in concert among the aforementioned shareholders:
Apart from中国人寿保险股份有限公司－分红－个人分红－005L-CT001沪 and 中国人寿保险股份有限公司－传统－普通保险产品－005L-FH002沪 which were both administrated by 中国人寿保险股份有限公司, Sinopec Corp. is not aware of any connected relationship or acting in concert among or between the above-mentioned shareholders.
2.3 Review of operating results
In the first quarter of 2021, the effects of global epidemic prevention and control have gradually emerged and China's economy maintained recovery growth with gross domestic product (GDP) up by 18.3%. The spot price of Platt's Brent for the first quarter averaged USD 60.9 per barrel, up by 21.2% year on year. The domestic demand for refined oil products recovered steadily and demand for natural gas and chemical products maintained rapid growth.
The company expedited to implement new development concepts and world-leading development strategies and implement the "One Foundation of energy and resources, Two wings of clean fuels and advanced chemicals and Three Growth Engines in new energy, new materials and new economy" industrial deployment pattern. To promote the efficiency and profitability of the whole industrial chain and comprehensively promote high-quality development, the Company actively responded to market changes and optimized production and operations arrangements and achieved good performance.
In accordance with China Accounting Standards for Business Enterprises, net profit attributable to equity shareholders of the Company was RMB 17.929 billion with a basic earnings of RMB 0.148 per share. In accordance with IFRS, net profit attributable to equity shareholders of the Company was RMB 18.543 billion with a basic earnings of RMB 0.153 per share, achieving a turnaround from loss to profit as compared with the same period in 2020, and better than that of the same period in 2019.
Exploration and Production: The Company continuously pressed ahead with high-efficiency exploration and profit-oriented development, accelerated systematic construction of natural gas production, supply, storage and marketing and achieved tangible results in maintaining oil production, increasing gas output and cutting cost. In exploration, we continued to strengthen risk exploration in strategic areas, oil and gas rich zones and shale resources, which led to significant breakthrough of oil and gas explorations in Shunbei, Sichuan basin and etc. In crude oil development, we efficiently proceeded with the capacity building of Shunbei, west rim of Jungar oilfields and other oilfields and strengthened fine development in mature fields and intensified EOR technology application to consolidate the basis for steady production. In natural gas development, we constantly pushed forward capacity building in West Sichuan, Weirong and Dongsheng gas fields and expanded the market and sales with the sales volume for the first quarter up by 37% year on year. In the first quarter, the Company's production of oil and gas reached 117.03 million barrels of oil equivalent, up by 4.2% year on year, with natural gas production reaching 291.60 billion cubic feet, up by 16.8% year on year. The exploration and production segment realised an earnings before interest and taxes (EBIT) of RMB 3.072 billion in the first quarter, up by 54.1%.
Exploration and Production
Unit
Three-month period ended 31 March
Changes
2021
2020
(%)
Oil and gas production
million boe
117.03
112.28
4.2
Crude oil production
million barrels
68.41
70.65
(3.2)
China
million barrels
61.23
62.11
(1.4)
Overseas
million barrels
7.18
8.54
(15.9)
Natural gas production
billion cubic feet
291.60
249.68
16.8
Realised crude oil price
USD/barrel
54.89
49.15
11.7
Realised natural gas price
USD/thousand cubic feet
7.07
6.43
10.0
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 brought the advantages of integrated refining and marketing into full play, actively responded to market change, optimized production operation, dynamically adjusted export scale and kept stable operation and high utilization rate with a significant increase of crude oil throughput. With a market oriented approach, we intensified product slate adjustment and increased output of marketable and high-profit products such as gasoline, jet-fuel, light chemical feedstock, asphalt, lubricants and etc. We optimized crude oil resources allocation and coordinated the whole process management of crude oil supply to lower procurement cost and also increased production of low-sulfur bunker fuel with an output of first quarter up by 187% and market share improving continuously. In the first quarter, the Company processed 62.52 million tonnes of crude oil, up by 16.3%. The refining segment realised EBIT of RMB 19.885 billion, achieving a turnaround from loss to profit as compared with the same period in 2020, and also better than that of the same period in 2019.
Refining
Unit
Three-month period ended 31 March
Changes
(%)
2021
2020
Refinery throughput
million tonnes
62.52
53.74
16.3
Gasoline, diesel and kerosene production
million tonnes
35.70
33.00
8.2
Gasoline
million tonnes
16.37
13.02
25.7
Diesel
million tonnes
14.34
14.19
1.1
Kerosene
million tonnes
4.99
5.79
(13.8)
Light chemical feedstock production
million tonnes
11.60
9.84
17.9
Light product yield
%
74.22
75.31
(1.09) percentage points
Refining yield
%
95.26
94.64
0.62 percentage
points
Note: Including 100% production of domestic joint ventures.
Marketing and Distribution: The Company brought the advantages of marketing network into full play, continuously improved marketing strategy and expanded market and increased sales with a significant increase of sales volume of refined oil products. With focus on customer needs, we vigorously adopted a differentiated marketing strategy to continuously improve retail volume. We constantly optimized the network layout to reach end users, and improved the network integrity, stability and competitiveness. We deepened non-fuel business reform and improved membership system. New model of "internet+service station+convenience store+third party operation" was promoted and more hydrogen stations were constructed with conventional service stations or alone to establish a new model of comprehensive energy supply and services, providing refined oil products, gas, hydrogen, power and services. In the first quarter, domestic sales volume of refined oil products was 40.03 million tonnes. The marketing and distribution segment realised EBIT of RMB 8.550 billion, achieving a turnaround from loss to profit as compared with the same period in 2020, and also better than that of same period in 2019.
Marketing and Distribution
Unit
Three-month period ended 31 March
Changes
(%)
2021
2020
Total sales volume of refined oil products
million tonnes
51.93
48.61
6.8
Total domestic sales volume of refined oil products
million tonnes
40.03
32.48
23.2
Retail
million tonnes
27.15
21.83
24.4
Direct sales & Distribution
million tonnes
12.88
10.65
20.9
Annualized average throughput per station
tonnes
3,536
2,844
24.3
Note: The total sales volume of refined oil products includes the amount of trading volume.
Chemicals: The company strengthened research on market needs, dynamically optimized facilities and product chain, optimized maintenance schedule, and realised an optimal operation of producing units and utilization rate. We integrated production with marketing, further fine-tuned chemical feedstock mix and product slate, increased production of acrylonitrile, BDO and other high profitable products, and continuously increased the ratio of high value-added and high-end products with the ratio of high value-added products of synthetic fiber reaching 33.6%, up by 0.6 percentage point, the ratio of high value-added products of synthetic rubber reaching 35.5%, up by 5.2 percentage points and the ratio of high value-added products of synthetic resin reaching 67.8%, up by 1.7 percentage points. We innovated marketing model, deepened fine marketing strategy, targeted our tailored service, and further expanded the market with a significant increase in sales volume of major chemical products. In the first quarter, the ethylene production was 3.380 million tonnes, up by 11.7% year on year, and the total chemical sales volume was 19.84 million tonnes, up by 10.53%. The chemicals segment realised EBIT of RMB 8.933 billion, achieving a turnaround from loss to profit as compared with the same period of 2020, and also better than that of the same period of 2019.
Chemicals
Unit
Three-month period ended 31 March
Changes
(%)
2021
2020
Ethylene
thousand tonnes
3,380
3,026
11.7
Synthetic resin
thousand tonnes
4,787
4,293
11.5
Synthetic rubber
thousand tonnes
322
256
25.8
Monomers and polymers for synthetic fibre
thousand tonnes
2,343
2,333
0.4
Synthetic fibre
thousand tonnes
351
266
32.0
Note: Including 100% production of domestic joint ventures.
Capital expenditure: In the first quarter, focusing on quality and profitability of investment, the Company continuously optimized investment projects, with total capital expenditures of RMB 23.0 billion. Capital expenditure for the exploration and production segment was RMB 9.0 billion, mainly for Fuling and Weirong natrual gas capacity building projects, Shunbei, Jiyang crude oil capacity building projects and phase II of Tianjin LNG project and phase II of Shangdong LNG project. Capital expenditure for the refining segment was RMB 7.6 billion, mainly for structural adjustment of Anqing project as well as the expansion of Zhenhai. Capital expenditure for the marketing and distribution segment was RMB 2.9 billion, mainly for construction of service stations, gas stations, comprehensive energy supply stations, refined oil products depots and non-fuel businesses. Capital expenditure for the chemicals segment was RMB 1.8 billion, mainly for construction of Zhenhai, Tianjin, Amur ethylene projects and Shanghai large-tow carbon fiber and Yizheng PTA projects. Capital expenditure for corporate and others was RMB 1.7 billion, mainly for R&D facilities and information technology projects.
3 Significant events
3.1 Significant changes in major items contained in the consolidated financial statements prepared in accordance with CASs and the reasons for such changes.
Items of Consolidated Balance Sheet
As of 31
March
2021
As of 31
December
2020
Increase/(Decrease)
Main reasons for changes
Amount
Percentage
RMB
million
RMB million
RMB million
（%）
Financial assets held for trading
3,723
1
3,722
372,200
Increase in structured deposits
Derivative financial assets
21,097
12,528
8,569
68
Increase in profit position of derivative hedging financial instruments due to fluctuation of crude oil price
Accounts receivable
47,144
35,587
11,557
32
Increase in accounts receivable due to increase of crude oil price
Short-term loans
48,834
20,756
28,078
135
Increase in low-interest short-term loans for supplementary of liquidity
Other current liabilities
40,885
17,775
23,110
130
Issuing short-term debentures payable of RMB 30 billion for supplementary of liquidity
Other comprehensive income
4,719
1,038
3,681
355
Increase in fair value gain of hedging business for crude oil and difference of foreign currency statement convertion affected by changes in foreign exchange rate
Specific reserve
2,544
1,941
603
31
The provision of safety production fund
Items of Consolidated Income Statement
For three-month period ended 31 March
Increase/(Decrease)
Main reasons for changes
2021
2020
Amount
Percentage
RMB Million
RMB
Million
RMB Million
（%）
Research and development expenses
2,069
1,091
978
90
Expand investment in research and development
Other income
474
1,103
(629)
(57)
Decrease in VAT refund of imported LNG
Gains/ (losses) from
changes in fair value
2,095
8,342
(6,247)
(75)
Decrease in fair value profit on derivative financial instruments not qualified as hedging
Items of consolidated cash flow statement
For three-month period ended 31 March
Increase/(Decrease)
Main reasons for changes
2021
2020
Amount
Percentage
RMB
million
RMB
million
RMB million
（%）
Payments of taxes and levies
(110,250)
(84,926)
(25,324)
-
Increase in payments of consumption tax and other taxes
Other cash received relating to investing activities
10,268
19,162
(8,894)
(46)
Decrease in value of certificate of deposit, over three months, expired and recovered
Net cash received from disposal of subsidiaries and other business entities
4,305
-
4,305
-
Balance payment of pipeline transaction received in this period
Cash paid for acquisition of investments
(5,527)
(1,672)
(3,855)
-
Increase in structured deposits
Other cash paid relating to investing activities
(7,077)
(14,094)
7,017
-
Decrease in the value of certificate of deposit, over three months
Cash repayments of borrowings
(58,339)
(173,688)
115,349
-
Decrease in repayment of short-term loans at maturity
3.2 This quarterly results announcement is published in both Chinese and English languages. In the event of any inconsistency between the two versions, the Chinese version shall prevail.
By Order of the Board
Chairman
Zhang Yuzhuo
28 April 2021
4 Appendix
4.1 Quarterly financial statements prepared under China Accounting Standards for Business Enterprises (CASs)
Consolidated Balance Sheet
As at 31 March 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
At 31 March 2021
At 31 December 2020
Current assets:
Cash at bank and on hand
198,086
184,412
Financial assets held for trading
3,723
1
Derivative financial assets
21,097
12,528
Accounts receivable
47,144
35,587
Receivables financing
9,793
8,735
Prepayments
10,478
4,862
Other receivables
29,340
33,602
Inventories
182,477
151,895
Other current assets
17,841
23,773
Total current assets
519,979
455,395
Non-current assets:
Long-term equity investments
194,524
188,342
Other equity instrument investments
1,546
1,525
Fixed assets
584,545
589,285
Construction in progress
126,774
124,765
Right-of-use assets
190,945
189,583
Intangible assets
113,652
114,066
Goodwill
8,623
8,620
Long-term deferred expenses
9,110
9,535
Deferred tax assets
27,422
25,054
Other non-current assets
25,024
27,635
Total non-current assets
1,282,165
1,278,410
Total assets
1,802,144
1,733,805
Consolidated Balance Sheet (Continued)
Current liabilities:
Short-term loans
48,834
20,756
Derivative financial liabilities
5,002
4,826
Bills payable
10,045
10,394
Accounts payable
162,382
151,262
Contract liabilities
128,886
126,160
Employee benefits payable
11,232
7,081
Taxes payable
42,770
76,843
Other payables
83,858
84,600
Non-current liabilities due within one year
25,843
22,493
Other current liabilities
40,885
17,775
Total current liabilities
559,737
522,190
Non-current liabilities:
Long-term loans
45,296
45,459
Debentures payable
38,441
38,356
Lease liabilities
173,093
172,306
Provisions
46,020
45,552
Deferred tax liabilities
10,120
8,124
Other non-current liabilities
18,705
17,942
Total non-current liabilities
331,675
327,739
Total liabilities
891,412
849,929
Shareholders' equity:
Share capital
121,071
121,071
Capital reserve
122,557
122,558
Other comprehensive income
4,719
1,038
Specific reserve
2,544
1,941
Surplus reserves
209,280
209,280
Retained earnings
304,504
286,575
Total equity attributable to shareholders of the Company
764,675
742,463
Minority interests
146,057
141,413
Total shareholders' equity
910,732
883,876
Total liabilities and shareholders' equity
1,802,144
1,733,805
Zhang Yuzhuo Ma Yongsheng Shou Donghua
Chairman President Chief Financial Officer
Balance Sheet
As at 31 March 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
At 31 March 2021
At 31 December 2020
Current assets：
Cash at bank and on hand
104,062
99,188
Derivative financial assets
7,776
7,776
Accounts receivable
22,810
21,763
Receivables financing
526
707
Prepayments
4,199
2,626
Other receivables
41,433
37,938
Inventories
41,817
39,034
Other current assets
16,570
14,048
Total current assets
239,193
223,080
Non-current assets：
Long-term equity investments
345,122
343,356
Other equity instrument investments
428
428
Fixed assets
280,394
283,695
Construction in progress
59,667
59,880
Right-of-use assets
108,617
108,737
Intangible assets
8,685
8,779
Long-term deferred expenses
2,287
2,499
Deferred tax assets
14,282
12,661
Other non-current assets
29,109
26,828
Total non-current assets
848,591
846,863
Total assets
1,087,784
1,069,943
Current liabilities：
Short-term loans
34,394
20,669
Derivative financial liabilities
362
362
Bills payable
5,461
6,061
Accounts payable
70,511
65,779
Contract liabilities
5,701
5,840
Employee benefits payable
4,172
1,673
Taxes payable
22,856
43,500
Other payables
171,126
188,568
Non-current liabilities due within one year
13,364
12,026
Other current liabilities
30,400
439
Total current liabilities
358,347
344,917
Company Balance Sheet (Continued)
Non-current liabilities：
Long-term loans
29,858
30,413
Debentures payable
26,980
26,977
Lease liabilities
105,153
105,691
Provisions
36,474
36,089
Other non-current liabilities
3,517
3,581
Total non-current liabilities
201,982
202,751
Total liabilities
560,329
547,668
Shareholders' equity：
Share capital
121,071
121,071
Capital reserve
68,996
68,976
Other comprehensive income
9,104
5,910
Specific reserve
1,448
1,189
Surplus reserves
209,280
209,280
Retained earnings
117,556
115,849
Total shareholders' equity
527,455
522,275
Total liabilities and shareholders' equity
1,087,784
1,069,943
Zhang Yuzhuo Ma Yongsheng Shou Donghua
Chairman President Chief Financial Officer
Consolidated Income Statement
For the three-month period ended 31 March 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month period
ended 31 March 2021
Three-month period
ended 31 March 2020
I. Operating income
576,982
554,482
II. Total Operating costs
549,384
582,239
Including: Operating costs
449,200
497,745
Taxes and surcharges
60,396
50,104
Selling and distribution expenses
16,054
14,662
General and administrative expenses
16,790
14,334
Research and development costs
2,069
1,091
Financial expenses
2,379
2,035
Exploration expenses,
including dry holes
2,496
2,268
Add: Other income
474
1,103
Investment income
(76)
153
Gains from changes in fair value
2,095
8,342
Credit impairment losses
14
5
Impairment losses
11
(10,360)
Asset disposal gains
164
60
III. Operating profit/(loss)
30,280
(28,454)
Add: Non-operating income
304
216
Less: Non-operating expenses
597
476
IV. Profit/(loss) before taxation
29,987
(28,714)
Less: Income tax expense
7,082
(7,529)
V. Net profit/(loss)
22,905
(21,185)
Classification by going concern:
(i) Net profit/(loss) from continuous operation
22,905
(21,185)
(ii) Net profit from discontinued operation
-
-
Classification by ownership:
(i) Equity shareholders of the Company
17,929
(19,866)
(ii) Minority interests
4,976
(1,319)
Consolidated Income Statement (Continued)
VI. Other comprehensive income
4,857
(7,360)
Items that may not be reclassified
subsequently to profit or loss:
Changes in fair value of other
equity instrument investments
20
-
Items that may be reclassified
subsequently to profit or loss:
Other comprehensive income that can
be converted into profit or loss under
the equity method
(135)
(76)
Fair value hedges
(20)
-
Cash flow hedges
4,627
(8,401)
Foreign currency translation differences
365
1,117
VII. Total comprehensive income
27,762
(28,545)
Equity shareholders of the Company
22,451
(27,187)
Minority interests
5,311
(1,358)
VIII. Earnings per share:
(i) Basic earnings per share (RMB/Share)
0.148
(0.164)
(ii) Diluted earnings per share (RMB/Share)
0.148
(0.164)
Zhang Yuzhuo Ma Yongsheng Shou Donghua
Chairman President Chief Financial Officer
Income Statement
For the three-month period ended 31 March 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month period
ended 31 March 2021
Three-month period
ended 31 March 2020
I. Operating income
227,855
199,942
Less: Operating costs
176,554
171,987
Taxes and surcharges
36,511
32,996
Selling and distribution expenses
967
724
General and administrative expenses
7,922
6,992
Research and development costs
1,956
1,034
Financial expenses
2,629
2,050
Exploration expenses, including dry holes
2,056
1,936
Add: Other income
232
896
Investment income
3,058
814
Gains from changes in fair value
288
400
Credit impairment losses
1
31
Impairment losses
(1)
(7,992)
Asset disposal gains
-
1
II. Operating profit/(loss)
2,838
(23,627)
Add: Non-operating income
99
33
Less: Non-operating expenses
311
232
III. Profit/(loss) before taxation
2,626
(23,826)
Less: Income tax expense
918
(6,002)
IV. Net profit/(loss)
1,708
(17,824)
(i) Net profit/(loss) from continuous operation
1,708
(17,824)
(ii) Net profit from discontinued operation
-
-
V. Other comprehensive income
3,514
(7,387)
Items that may be reclassified subsequently
to profit or loss
Other comprehensive loss that can be converted into profit or loss under
the equity method
7
49
Cash flow hedges
3,507
(7,436)
VI. Total comprehensive income
5,222
(25,211)
Zhang Yuzhuo Ma Yongsheng Shou Donghua
Chairman President Chief Financial Officer
Consolidated Cash Flow Statement
For the three-month period ended 31 March 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month period
ended 31 March 2021
Three-month period
ended 31 March 2020
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services
605,032
598,622
Refund of taxes and levies
39
818
Other cash received relating to operating activities
37,445
35,349
Sub-total of cash inflows
642,516
634,789
Cash paid for goods and services
(485,354)
(541,718)
Cash paid to and for employees
(18,036)
(17,033)
Payments of taxes and levies
(110,250)
(84,926)
Other cash paid relating to operating
activities
(44,454)
(59,082)
Sub-total of cash outflows
(658,094)
(702,759)
Net cash flow from operating activities
(15,578)
(67,970)
II. Cash flows from investing activities:
Cash received from disposal of investments
177
3,402
Cash received from returns on investments
895
986
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
324
18
Other cash received relating to investing
activities
10,268
19,162
Net cash received from disposal of subsidiaries and other business entities
4,305
-
Sub-total of cash inflows
15,969
23,568
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
(27,417)
(22,350)
Cash paid for acquisition of investments
(5,527)
(1,672)
Other cash paid relating to investing
activities
(7,077)
(14,094)
Sub-total of cash outflows
(40,021)
(38,116)
Net cash flow from investing activities
(24,052)
(14,548)
III. Cash flows from financing activities:
Cash received from capital contributions
124
260
Including: Cash received from minority shareholders' capital contributions to subsidiaries
48
260
Consolidated Cash Flow Statement (Continued)
Cash received from borrowings
114,768
275,885
Other cash received relating to financing activities
7
276
Sub-total of cash inflows
114,899
276,421
Cash repayments of borrowings
(58,339)
(173,688)
Cash paid for dividends, profits distribution or interest
(1,784)
(1,583)
Including: Subsidiaries' cash payments for distribution of dividends or profits to minority shareholders
(840)
(160)
Other cash paid relating to financing
activities
(3,662)
(3,492)
Sub-total of cash outflows
(63,785)
(178,763)
Net cash flow from financing activities
51,114
97,658
IV. Effects of changes in foreign exchange rate
204
553
V. Net increase in cash and cash equivalents
11,688
15,693
Add: Initial balance of cash and cash equivalents
87,559
60,438
VI. Ending balance of cash and cash equivalents
99,247
76,131
Zhang Yuzhuo Ma Yongsheng Shou Donghua
Chairman President Chief Financial Officer
Cash Flow Statement
For the three-month period ended 31 March 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month period
ended 31 March 2021
Three-month period
ended 31 March 2020
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services
249,027
217,331
Refund of taxes and levies
21
798
Other cash received relating to operating activities
6,966
1,619
Sub-total of cash inflows
256,014
219,748
Cash paid for goods and services
(184,870)
(175,248)
Cash paid to and for employees
(9,474)
(8,835)
Payments of taxes and levies
(63,405)
(53,244)
Other cash paid relating to operating activities
(6,431)
(5,349)
Sub-total of cash outflows
(264,180)
(242,676)
Net cash flow from operating activities
(8,166)
(22,928)
II. Cash flows from investing activities:
Cash received from disposal of investments
4,399
4,759
Cash received from returns on investments
1,567
1,224
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
17
3
Other cash received relating to investing activities
26,174
44,575
Sub-total of cash inflows
32,157
50,561
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
(11,540)
(9,307)
Cash paid for acquisition of investments
(9,795)
(2,807)
Other cash paid relating to investing activities
(26,479)
(47,607)
Sub-total of cash outflows
(47,814)
(59,721)
Net cash flow from investing activities
(15,657)
(9,160)
III. Cash flows from financing activities:
Cash received from borrowings
73,395
130,458
Other cash received relating to financing activities
307,581
57,475
Sub-total of cash inflows
380,976
187,933
Cash repayments of borrowings
(30,225)
(66,328)
Cash paid for dividends or interest
(2,005)
(875)
Other cash paid relating to financing activities
(318,350)
(72,108)
Sub-total of cash outflows
(350,580)
(139,311)
Net cash flow from financing activities
30,396
48,622
Cash Flow Statement (Continued)
IV. Net increase in cash and cash equivalents
6,573
16,534
Add：Initial balance of cash and cash equivalents
28,081
38,616
V. Ending balance of cash and cash equivalents
34,654
55,150
Zhang Yuzhuo Ma Yongsheng Shou Donghua
Chairman President Chief Financial Officer
Segment Reporting
For the three-month period ended 31 March 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month period
ended 31 March 2021
Three-month period
ended 31 March 2020
Income from principal operations
Exploration and production
External sales
34,776
26,944
Inter-segment sales
18,812
18,238
Subtotal
53,588
45,182
Refining
External sales
37,727
25,145
Inter-segment sales
259,339
217,468
Subtotal
297,066
242,613
Marketing and distribution
External sales
278,914
248,725
Inter-segment sales
1,359
1,226
Subtotal
280,273
249,951
Chemicals
External sales
95,550
71,652
Inter-segment sales
14,102
15,354
Subtotal
109,652
87,006
Corporate and others
External sales
114,257
169,142
Inter-segment sales
161,530
131,839
Subtotal
275,787
300,981
Elimination of inter-segment sales
(455,142)
(384,125)
Consolidated income from principal operations
561,224
541,608
Income from other operations
Exploration and production
1,754
1,272
Refining
1,148
932
Marketing and distribution
9,877
6,939
Chemicals
2,604
3,405
Corporate and others
375
326
Consolidated income from other operations
15,758
12,874
Consolidated operating income
576,982
554,482
Segment Reporting (Continued)
Operating profit/(loss)
By segment
Exploration and production
1,885
404
Refining
19,656
(26,299)
Marketing and distribution
8,009
(2,621)
Chemicals
6,852
(1,894)
Corporate and others
1,300
(5,667)
Elimination
(7,700)
-
Total segment operating profit/(loss)
30,002
(36,077)
Investment income
Exploration and production
803
476
Refining
(10)
(680)
Marketing and distribution
269
657
Chemicals
1,828
(66)
Corporate and others
(2,966)
(234)
Total segment investment income
(76)
153
Financial expenses
(2,379)
(2,035)
Gains/(losses) from changes in fair value
2,095
8,342
Asset disposal gains/(losses)
164
63
Other income
474
1,100
Operating profit/(loss)
30,280
(28,454)
Add: Non-operating income
304
216
Less: Non-operating expenses
597
476
Profit/(loss) before taxation
29,987
(28,714)
4.2 Quarterly financial statements prepared under International Financial Reporting Standards (IFRS)
Consolidated Income Statement
For the three-month period ended 31 March 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month period
ended 31 March 2021
Three-month period
ended 31 March 2020
Turnover and other operating revenues
Turnover
561,224
541,608
Other operating revenues
15,758
12,874
Subtotal
576,982
554,482
Operating expenses
Purchased crude oil, products and
operating supplies and expenses
(422,730)
(482,608)
Selling, general and administrative expenses
(12,358)
(10,505)
Depreciation, depletion and amortisation
(26,536)
(25,157)
Exploration expenses, including dry holes
(2,496)
(2,268)
Personnel expenses
(21,774)
(19,147)
Taxes other than income tax
(60,396)
(50,105)
Other operating (expense)/revenue, net
(1,991)
8,875
Total operating expenses
(548,281)
(580,915)
Operating profit/(loss)
28,701
(26,433)
Finance costs
Interest expense
(3,684)
(3,922)
Interest income
1,297
1,086
Foreign currency exchange loss, net
8
801
Net finance costs
(2,379)
(2,035)
Investment income
68
29
Share of profits less losses from associates and joint ventures
4,311
472
Profit /(loss) before taxation
30,701
(27,967)
Income tax expense
(7,082)
7,529
Profit /(loss) for the period
23,619
(20,438)
Attributable to：
Owners of the Company
18,543
(19,229)
Non-controlling interests
5,076
(1,209)
Profit /(loss)for the period
23,619
(20,438)
Earnings per share
Basic earnings per share (RMB)
0.153
(0.159)
Diluted earnings per share (RMB)
0.153
(0.159)
Consolidated Statement of Comprehensive Income
For the three-month period ended 31 March 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month period
ended 31 March 2021
Three-month period
ended 31 March 2020
Profit for the period
23,619
(20,438)
Other comprehensive income:
4,857
(7,360)
Items that may not be reclassified subsequently to profit or loss:
Equity investments at fair value through other comprehensive income
20
-
Items that may be reclassified subsequently to profit or loss:
Fair value hedges
(20)
-
Share of other comprehensive income of associates and joint ventures
(135)
(76)
Cash flow hedges
4,627
(8,401)
Foreign currency translation differences
365
1,117
Total comprehensive income
28,476
(27,798)
Attributable to:
Shareholders of the Company
23,065
(26,550)
Non-controlling interests
5,411
(1,248)
Consolidated Balance Sheet
For the three-month period ended 31 March 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
At 31 March 2021
At 31 December 2020
Non-current assets：
Property, plant and equipment, net
584,395
589,247
Construction in progress
126,774
124,765
Right-of-use assets
268,061
266,368
Goodwill
8,623
8,620
Interest in associates
138,308
136,163
Interest in joint ventures
56,216
52,179
Financial assets at fair value through other
comprehensive income1,546
1,525
Deferred tax assets
27,422
25,054
Long-term prepayments and other non-current assets
70,820
74,489
Total non-current assets
1,282,165
1,278,410
Current assets:
Cash and cash equivalents
99,247
87,559
Time deposits with financial institutions
98,839
100,498
Financial assets at fair value through profit and
loss3,723
1
Derivatives financial assets
21,097
12,528
Trade accounts receivable and bills receivable
47,144
35,587
Financial assets at fair value through other
comprehensive income9,793
8,735
Inventories
182,477
151,895
Prepaid expenses and other current assets
57,659
58,592
Total current assets
519,979
455,395
Current liabilities：
Short-term debts
74,991
23,769
Loans from Sinopec Group Company and fellow
subsidiaries10,790
5,264
Lease liabilities
16,961
15,292
Derivatives financial liabilities
5,002
4,826
Trade accounts payable and bills payable
172,427
161,656
Contract liabilities
128,886
126,160
Other payables
143,519
178,637
Income tax payable
7,161
6,586
Total current liabilities
559,737
522,190
Consolidated Balance Sheet (Continued)
Net current liabilities
39,758
66,795
Total assets less current liabilities
1,242,407
1,211,615
Non-current liabilities：
Long-term debts
72,041
72,037
Loans from Sinopec Group Company and fellow subsidiaries
11,696
11,778
Lease liabilities
173,093
172,306
Deferred tax liabilities
10,120
8,124
Provisions
46,020
45,552
Other non-current liabilities
19,711
18,960
Total non-current liabilities
332,681
328,757
Total net assets
909,726
882,858
Equity：
Share capital
121,071
121,071
Reserves
642,646
620,423
Total equity attributable to shareholders of the Company
763,717
741,494
Non-controlling interests
146,009
141,364
Total equity
909,726
882,858
Consolidated Cash Flow Statement
For the three-month period ended 31 March 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month period
ended 31 March 2021
Three-month period
ended 31 March 2020
Net cash generated from operating activities(a)
(15,578)
(67,970)
Investing activities
Capital expenditure
(20,561)
(20,455)
Exploratory wells expenditure
(6,856)
(1,895)
Purchase of investments, investments in associates and investments in joint ventures
(2,327)
(1,672)
Payment for financial assets at fair value through profit or loss
(3,200)
-
Proceeds from disposal of investments and investments in associates
4,482
3,402
Proceeds from disposal of property, plant, equipment and other non-current assets
324
18
Increase in time deposits with maturities over three months
(4,748)
(13,912)
Decrease in time deposits with maturities over three months
9,359
18,553
Interest received
287
609
Investment and dividend income received
895
986
Repayments of other investing activities
(1,707)
(182)
Net cash used in investing activities
(24,052)
(14,548)
Financing activities
Proceeds from bank and other loans
114,768
275,885
Repayments of bank and other loans
(58,339)
(173,688)
Contributions to subsidiaries from non-controlling interests
124
260
Distributions by subsidiaries to non-controlling interests
(840)
(160)
Interest paid
(944)
(1,423)
Payments made to acquire non-controlling interests
-
(1,117)
Repayments of lease liabilities
(3,649)
(2,375)
(Repayments)/proceeds from other financing activities
(6)
276
Net cash used in financing activities
51,114
97,658
Net increase in cash and cash equivalents
11,484
15,140
Cash and cash equivalents at 1 January
87,559
60,438
Effect of foreign currency exchange rate changes
204
553
Cash and cash equivalents at 31 March
99,247
76,131
Note to consolidated statement of Cash Flows
For the three-month period ended 31 March 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
(a) Reconciliation of profit before taxation to net cash generated from operating activities
Items
Three-month period ended 31
March 2021
Three-month period ended 31
March 2020
Operating activities
Profit before taxation
30,701
(27,967)
Adjustments for:
Depreciation, depletion and amortisation
26,536
25,157
Dry hole costs written off
1,222
1,863
Share of profits from associates and joint ventures
(4,311)
(472)
Investment income
(68)
(29)
Interest income
(1,297)
(715)
Interest expense
3,684
3,684
Gain on foreign currency exchange rate changes and
derivative financial instruments(2,087)
(8,589)
Gain on disposal of property, plant, equipment and
other non-current assets, net(164)
(3)
Impairment (reversal)/loss on assets
(11)
10,360
Credit impairment reversal
(14)
(5)
Operating profit before change of operating capital
54,191
3,284
Accounts receivable and other current assets
(13,918)
(48,286)
Inventories
(30,619)
(501)
Accounts payable and other current liabilities
(22,509)
(17,410)
Subtotal
(12,855)
(62,913)
Income tax paid
(2,723)
(5,057)
Net cash generated from operating activities
(15,578)
(67,970)
Segment Reporting
For the three-month period ended 31 March 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month period
ended 31 March 2021
Three-month period
ended 31 March 2020
Turnover
Exploration and production
External sales
34,776
26,944
Inter-segment sales
18,812
18,238
Subtotal
53,588
45,182
Refining
External sales
37,727
25,145
Inter-segment sales
259,339
217,468
Subtotal
297,066
242,613
Marketing and distribution
External sales
278,914
248,725
Inter-segment sales
1,359
1,226
Subtotal
280,273
249,951
Chemicals
External sales
95,550
71,652
Inter-segment sales
14,102
15,354
Subtotal
109,652
87,006
Corporate and others
External sales
114,257
169,142
Inter-segment sales
161,530
131,839
Subtotal
275,787
300,981
Elimination of inter-segment sales
(455,142)
(384,125)
Turnover
561,224
541,608
Other operating revenues
Exploration and production
1,754
1,272
Refining
1,148
932
Marketing and distribution
9,877
6,939
Chemicals
2,604
3,405
Corporate and others
375
326
Other operating revenues
15,758
12,874
Turnover and other operating revenues
576,982
554,482
Result
Operating profit/(loss)
Segment Reporting (Continued)
By segment
Exploration and production
2,356
1,518
Refining
19,487
(25,794)
Marketing and distribution
8,021
(1,536)
Chemicals
7,104
(1,696)
Corporate and others
(567)
1,075
Elimination
(7,700)
-
Total segment operating profit/(loss)
28,701
(26,433)
Share of profits from associates and joint ventures
Exploration and production
656
476
Refining
412
(682)
Marketing and distribution
525
287
Chemicals
1,795
(76)
Corporate and others
923
467
Aggregate share of profits from associates and joint ventures
4,311
472
Investment income/(losses)
Exploration and production
60
-
Refining
(14)
2
Marketing and distribution
4
14
Chemicals
34
8
Corporate and others
(16)
5
Aggregate investment income
68
29
Net finance costs
(2,379)
(2,035)
Profit/(loss) before taxation
30,701
(27,967)
4.3 Differences between consolidated financial statements prepared in accordance with the accounting policies complying with the accounting policies complying with CASs and IFRS (Unaudited)
Other than the differences in the classifications of certain financial statements captions and the accounting for the items described below, there are no material differences between the Group's consolidated financial statements prepared in accordance with the accounting policies complying with CASs and IFRS. The reconciliation presented below is included as supplemental information, is not required as part of the basic financial statements and does not include differences related to classification, presentation or disclosures. Such information has not been subject to independent audit or review. The major differences are:
(i) Government grants
Under CASs, grants from the government are credited to capital reserve if required by relevant governmental regulations. Under IFRS, government grants relating to the purchase of fixed assets are recognised as deferred income and are transferred to the income statement over the useful life of these assets.
(ii) Safety production fund
Under CASs, safety production fund should be recognised in profit or loss with a corresponding increase in reserve according to PRC regulations. Such reserve is reduced for expenses incurred for safety production purposes or, when safety production related fixed assets are purchased, is reduced by the purchased cost with a corresponding increase in the accumulated depreciation. Such fixed assets are not depreciated thereafter. Under IFRS, payments are expensed as incurred, or capitalised as fixed assets and depreciated according to applicable depreciation methods.
Effects of major differences between the net profit under CASs and the profit for the period under IFRS are analysed as follows:
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month period
ended 31 March 2021
Three-month period
ended 31 March 2020
Net profit/(loss) under CASs
22,905
(21,185)
Adjustments:
Government grants(i)
12
12
Safety production fund(ii)
702
735
Profit/(loss) for the period under IFRS
23,619
(20,438)
Effects of major differences between the shareholders' equity under CASs and the total equity under IFRS are analysed as follows:
Units: million Currency: RMB Type: unaudited
Items
As of 31 March 2021
As of 31 December 2020
Shareholders' equity under CASs
910,732
883,876
Adjustments:
Government grants(i)
(1,006)
(1,018)
Total equity under IFRS
909,726
882,858
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