REG - China Pet &Chem Corp - 3rd Quarter Results
RNS Number : 4644DChina Petroleum & Chemical Corp28 October 2020
China Petroleum & Chemical Corporation
The Third Quarterly Report for 2020
28 October 2020
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 third quarterly report for 2020 was approved at the 18th 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 Corporate Accounting 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 30 September 2020
As of 31
December 2019
Changes from the
end of last year(%)
Total assets
1,799,388
1,755,071
2.5
Total equity attributable to equity shareholders of the Company
729,179
739,169
(1.4)
RMB million
Items
Nine-month period ended 30 September
Changes over the same period of the preceding year (%)
2020
2019
Net cash flow from operating activities
83,639
81,398
2.8
Operating income
1,554,617
2,233,305
(30.4)
Net profit attributable to equity shareholders of the Company
23,507
43,281
(45.7)
Net profit attributable to equity shareholders of the Company excluding extraordinary gains and losses
(10,257)
41,546
-
Weighted average return on net assets (%)
3.18
5.93
(2.75) percentage points
Basic earnings per share (RMB)
0.194
0.357
(45.7)
Diluted earnings per share (RMB)
0.194
0.357
(45.7)
RMB million
Extraordinary items
Third Quarter of 2020
(gain)/loss
RMB million
Nine-month period ended 30 September 2020
(gain)/loss
RMB million
Net gain on disposal of non-current assets
(480)
(569)
Donations
134
233
Government grants
(2,074)
(4,768)
Gains on holding and disposal of various investments
(38,675)
(38,717)
Other extraordinary income and expenses, net
365
799
Subtotal
(40,730)
(43,022)
Tax effect
6,005
6,671
Total
(34,725)
(36,351)
Attributable to:
Equity shareholders of the Company
(32,242)
(33,764)
Minority interests
(2,483)
(2,587)
2.1.2 Principal financial data and indicators prepared in accordance with International Financial Reporting Standards (IFRS)
RMB million
Items
As of 30 September
2020
As of 31 December
2019
Changes from the end of the last year (%)
Total assets
1,799,388
1,755,071
2.5
Total equity attributable to shareholders of the Company
728,198
738,150
(1.3)
RMB million
Items
Nine-month period ended 30 September
Changes over the same period of the preceding year (%)
2020
2019
Net cash generated from operating activities
83,639
81,398
2.8
Operating profit
5,028
68,340
(92.6)
Net profit attributable to shareholders of the Company
24,459
44,226
(44.7)
Basic earnings per share (RMB)
0.202
0.365
(44.7)
Diluted earnings per share (RMB)
0.202
0.365
(44.7)
Return on net assets (%)
3.36
6.10
(2.74) percentage points
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 571,928, including 566,153 holders of domestic A shares and 5,775 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
25,513,438,600
21.07
Unknown
H share
中国证券金融股份有限公司
2,609,312,057
2.16
0
A share
中国人寿保险股份有限公司-分红-个人分红-005L-FH002沪
794,572,268
0.66
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
789,500,381
0.65
0
A share
香港中央结算有限公司
513,111,570
0.42
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
中国工商银行-上证50交易型开放式指数证券投资基金
96,597,458
0.08
0
A share
东吴证券股份有限公司
53,088,400
0.04
0
A share
朱有芹
47,604,683
0.04
0
A share
Note Sinopec Century Bright Capital Investment Limited, overseas wholly-owned subsidiary of China Petrochemical Corporation, holds 553,150,000 H shares, accounting for 0.46% of the total share capital of Sinopec Corp. Such shareholdings are included in the total number of 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-FH002沪 and 中国人寿保险股份有限公司-传统-普通保险产品-005L-CT001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 three quarters of 2020, due to the worldwide spread of COVID-19, global economy was depressed and the global market was shrinking. The growth of China's economy turned positive, with GDP up by 0.7% year-on-year in the first three quarters, among which up by 4.9% in the third quarter, indicating a good continuous recovery momentum. In the first three quarters of 2020, the average spot price of Platts Brent was USD 42.5 per barrel, down by 34.4% year on year. Domestic demand for natural gas and chemical products maintained growth and demand for refined oil products recovered steadily quarter on quarter.
Confronted with the severe and complex market situation, the Company adhered to the principles of "focusing on main challenges, system optimization, bottom-line risks prevention and control and seizing opportunities out of crisis" and vigorously adjusted structure, expanded market, reduced inventory and tapped potential. On the basis of favorable results of "100-day campaign to tide over difficulties and improve performances", the Company launched a higher standard campaign of continuously tiding over difficulties and improving performances, seized the opportunity of domestic market demand recovery and made all-out efforts to tide over the difficulties of pandemic along with low crude oil price and achieved significant improvement of operation and profitability. The Company completed the transaction of oil and gas pipeline assets on 30 September 2020 and the contribution of asset appreciation to earnings was booked in the third quarter.
In accordance with CASs, net profit attributable to equity shareholders of the Company was RMB 23.507 billion, among which the net profit attributable to equity shareholders of the Company in the third quarter was RMB 46.389 billion. In accordance with IFRS, net profit attributable to equity shareholders of the Company was RMB 24.459 billion, among which the net profit attributable to equity shareholders of the Company in the third quarter was RMB 46.184 billion.
Exploration and Production: Under low crude oil price environment, the Company insisted on high-quality exploration, focused on profit-driven development, accelerated capacity building and proactively expanded market and sales of natural gas and further deepened the maintaining oil production, increasing gas output and reducing cost. In exploration, new discoveries were made in Tarim Basin, Jiyang Depression and Sichuan Basin, etc. In oil development, we increased the application of technologies to lower cost and optimized projects implementation plan, which helped to further decrease our cost. In natural gas development, we accelerated capacity building in West Sichuan, Dongsheng and Weirong gas fields, and continuously progressed with the development of Fuling, Puguang and Yuanba gas fields. In the first three quarters, domestic crude production kept stable and sales of natural gas increased by 9.86% year on year, realizing a continued growth in market share of natural gas. The exploration and production segment realised earnings before interest and taxes (EBIT) of RMB 13.16 billion in the third quarter.
Exploration and Production
Unit
Nine-month period ended 30 September
Changes
2020
2019
(%)
Oil and gas production
million boe
339.39
341.74
(0.7)
Crude oil production
million barrels
210.65
212.78
(1.0)
China
million barrels
186.69
186.69
0.0
Overseas
million barrels
23.96
26.09
(8.2)
Natural gas production
billion cubic feet
772.14
773.41
(0.2)
Realised crude oil price
USD/barrel
38.24
58.82
(35.0)
Realised natural gas price
USD/thousand cubic feet
5.32
6.19
(14.1)
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: With the market oriented approach, the Company took advantage of the recovery of domestic demand in the third quarter, further integrated production and marketing, maintained high utilization rates of facilities and maximized the profitability of value chain. We dynamically adjusted product mix, increased the supply of chemical feedstock and increased production of asphalt, lubricant and other marketable products. We optimized crude oil procurement and decreased cost. In the third quarter, refinery throughput was 63.51 million tonnes, up by 11.0% quarter on quarter and 1.9% year on year and 38.01 million tonnes of refined oil products were produced, representing a quarter-on-quarter increase of 11.2%, and 10.53 million tonnes of light chemical feedstock were produced, representing a quarter-on quarter increase of 15.0% and a year-on-year increase of 5.3%. The refining segment realized EBIT of RMB 31.55 billion in the third quarter.
Refining
Unit
Nine-month period ended 30 September
Changes
(%)
2020
2019
Refinery throughput
million tonnes
174.46
186.26
(6.3)
Gasoline, diesel and kerosene production
million tonnes
105.19
119.54
(12.0)
Gasoline
million tonnes
42.46
47.20
(10.0)
Diesel
million tonnes
47.86
49.01
(2.3)
Kerosene
million tonnes
14.87
23.33
(36.3)
Light chemical feedstock production
million tonnes
29.54
30.05
(1.7)
Light product yield
%
74.63
76.44
(1.81)
percentage points
Refining yield
%
94.89
94.99
(0.10)
percentage points
Note : Including 100% production of domestic joint ventures.
Marketing and Distribution: Facing fierce market competition, the Company strengthened market analysis, leveraged the advantages of integration, balanced volume and profit, expanded sales and increased profit, and achieved continuous recovery in sales volume. We innovated marketing model by introducing the "one click refueling", etc., promoted the integration of online and offline business, created a new service model of reducing physical contact while refueling and shopping in a more efficient and convenient way to constantly improve our services. In the third quarter, domestic sales volume of refined oil products was 45.44 million tonnes, up by 0.4% quarter on quarter. The marketing and distribution segment realized EBIT of RMB 18.24 billion in the third quarter.
Marketing and Distribution
Unit
Nine-month period ended 30 September
Changes
(%)
2020
2019
Total sales volume of refined oil products
million tonnes
162.25
192.42
(15.7)
Total domestic sales volume of refined oil products
million tonnes
123.19
139.25
(11.5)
Retail
million tonnes
83.06
91.80
(9.5)
Direct sales & Distribution
million tonnes
40.13
47.45
(15.4)
Annualised average throughput per station
tonnes/station
3,605
3,991
(9.7)
Note: The total sales volume of refined oil products includes the amount of trading volume.
Chemicals: The Company fine-tuned chemical feedstock mix to further lower costs, optimized operation and product slate, increased the ratio of high value-added products with the ratio of new and specialty synthetic resin reaching 68.6% and ratio of high value-added synthetic rubber reaching 31.3%. Construction of key projects was accelerated. In the third quarter, ethylene output was 3.07 million tonnes, up by 11.8% quarter-on-quarter. We accelerated expanding high-end products market, such as medical resin, antibacterial materials and automotive material etc. and optimized layout and logistics operation to enhance profitability of business chain. In the third quarter, the total chemical sales volume was 22.33 million tonnes, up by 0.86% quarter on quarter. The chemical segment realized EBIT of RMB 4.22 billion in the third quarter.
Chemicals
Unit
Nine-month period ended 30 September
Changes
(%)
2020
2019
Ethylene
thousand tonnes
8,850
9,295
(4.8)
Synthetic resin
thousand tonnes
12,773
12,749
0.2
Monomers and polymers for synthetic fibre
thousand tonnes
6,711
7,511
(10.7)
Synthetic fibre
thousand tonnes
935
968
(3.4)
Synthetic rubber
thousand tonnes
790
794
(0.5)
Note : Including 100% production of domestic joint ventures.
Capital expenditure: Focusing on quality and profitability of investment, the Company continuously optimised our investment projects. In the first three quarters, total capital expenditures were RMB 71.858 billion. Capital expenditures for the exploration and production segment were RMB 32.172 billion, mainly for capacity building in Shengli, Northwest, West Sichuan and Dongsheng oil and gas projects. Capital expenditures for the refining segment were RMB 13.819 billion, mainly for Zhongke project, Zhenhai, Tianjin, Maoming and Luoyang refining upgrading projects. Capital expenditures for the marketing and distribution segment were RMB 13.768 billion, mainly for construction of service stations, oil products depots and non-fuel business development. Capital expenditures for the chemicals segment were RMB 10.458 billion, mainly for Zhongke, Zhenhai, and Gulei, ethylene revamping for Sinopec-SK and Jiujiang aromatics projects, and melt blown fabrics projects. Capital expenditures for corporate and others were RMB 1.641 billion, mainly for R&D facilities and IT application 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 30 September
2020
As of 31 December
2019
Increase/(Decrease)
Main reasons for changes
Amount
Percentage
RMB million
RMB million
RMB million
(%)
Financial assets held for trading
1,427
3,319
(1,892)
(57)
Receipt of the structured deposits at maturity
Derivative financial assets
7,875
837
7,038
841
Changes of fair value loss and profit position of derivative hedging financial instruments due to fluctuation of crude oil price
Derivative financial liabilities
13,580
2,729
10,851
398
Prepayments
7,474
5,066
2,408
48
Increase in prepayments for equipment
Other current assets
19,762
28,669
(8,907)
(31)
Decrease of undeducted value-added tax balance
Bills payable
15,681
11,834
3,847
33
Increase in bills payable settlement scale
Taxes payable
42,046
69,339
(27,293)
(39)
Due to the time difference of tax payment
Debentures payable
38,849
19,157
19,692
103
Due to the new issuance of medium-term notes
Other comprehensive income
(3,075)
(321)
(2,754)
-
Due to difference of foreign currency statement convertion affected by changes in foreign exchange rate
Specific reserve
2,658
1,741
917
53
The provision of safety production fund
Items of Consolidated Income Statement
Nine-month period ended 30 September
Increase/(Decrease)
Main reasons for changes
2020
2019
Amount
Percentage
RMB Million
RMB Million
RMB Million
(%)
Operating income
1,554,617
2,233,305
(678,688)
(30)
Decrease of sales volume prices
Operating cost
1,268,329
1,881,083
(612,754)
(33)
Investment income
42,051
6,475
35,576
549
Influence of oil and gas pipeline transaction
Gains/(losses) from changes in fair value
1,738
(1,426)
3,164
-
Increase in fair value profit on derivative financial instruments not qualified as hedging
Impairment losses
(11,415)
(91)
(11,324)
-
Increase of inventory impairment
Income tax expenses
6,012
13,868
(7,856)
(57)
Decrease of profits
Items of consolidated cash flow statement
Nine-month period ended 30 September
Increase/(Decrease)
Main reasons for changes
2020
2019
Amount
Percentage
RMB
million
RMB
million
RMB million
(%)
Other cash received relating to operational activities
156,475
102,241
54,234
53
Changes of margin deposit of financial derivative business
Other cash paid relating to operational activities
(180,841)
(131,492)
(49,349)
-
Cash received from returns on investments
7,962
19,455
(11,493)
(59)
Changes of structured deposits
Cash paid for acquisition of investments
(7,407)
(14,296)
6,889
-
Other cash received from investing activities
41,758
67,954
(26,196)
(39)
Decrease in value of certificate of deposit, over three months, expired and recovered
Cash received from capital contributions
3,395
2,222
1,173
53
Increase in investment of minority shareholders
Cash paid for dividends, profits distribution or interest
(31,000)
(55,447)
24,447
-
Special dividend in 2020 has not been paid yet in the reporting period.
3.2 Sinopec Corp. and its subsidiaries transferred their equity interests in relevant companies, oil and gas pipeline assets and other facilities to China Oil & Gas Pipeline Network Corporation (" PipeChina") in exchange for newly issued shares of and cash paid by PipeChina as consideration. The ownership, obligations, responsibilities and risks of the relevant target assets was transferred to PipeChina from 24:00 on 30 September 2020. For details, please refer to the announcement of "Major Transaction and Discloseable Transaction Announcement-Disposal of Assets and External Investment" (announcement No. 2020-24) published by Sinopec Corp. on 24 July 2020 and "Announcement on Disposal of Pipeline Inventory"(announcement No.2020-39) and "Announcement on Closing of Disposal of Assets and External Investment"(announcement No.2020-39) in China Securities Journal, Shanghai Securities News and, Securities Times and on the website of Shanghai Stock Exchange.
3.3 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
Zhang Yuzhuo
Chairman
28 October, 2020
4 Appendix
4.1 Quarterly financial statements prepared under China Accounting Standards for Business Enterprises (CASs)
Consolidated Balance Sheet
as at 30 September 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
At 30 September 2020
At 31 December 2019
Current assets:
Cash at bank and on hand
179,945
127,927
Financial assets held for trading
1,427
3,319
Derivative financial assets
7,875
837
Accounts receivable
43,919
54,865
Receivables financing
10,040
8,622
Prepayments
7,474
5,066
Other receivables
107,488
24,109
Inventories
173,051
192,442
Other current assets
19,762
28,669
Total current assets
550,981
445,856
Non-current assets:
Long-term equity investments
190,473
152,204
Other equity instrument investments
1,519
1,521
Fixed assets
553,928
622,423
Construction in progress
141,068
173,482
Right-of-use assets
190,807
198,051
Intangible assets
109,978
108,956
Goodwill
8,679
8,697
Long-term deferred expenses
8,970
8,930
Deferred tax assets
24,065
17,616
Other non-current assets
18,920
17,335
Total non-current assets
1,248,407
1,309,215
Total assets
1,799,388
1,755,071
Current liability:
Short-term loans
39,872
31,196
Derivative financial liabilities
13,580
2,729
Bills payable
15,681
11,834
Accounts payable
158,335
187,958
Contract liabilities
136,947
126,735
Employee benefits payable
14,129
4,769
Taxes payable
42,046
69,339
Other payables
95,033
72,324
Non-current liabilities due within one year
59,223
69,490
Other current liabilities
26,793
-
Total current liabilities
601,639
576,374
Non-current liabilities:
Long-term loans
43,015
39,625
Debentures payable
38,849
19,157
Lease liabilities
173,945
177,674
Provisions
44,086
43,163
Deferred tax liabilities
7,880
6,809
Other non-current liabilities
20,414
15,364
Total non-current liabilities
328,189
301,792
Total liabilities
929,828
878,166
Shareholders' equity:
Share capital
121,071
121,071
Capital reserve
121,946
122,127
Other comprehensive income
(3,075)
(321)
Specific reserve
2,658
1,741
Surplus reserves
207,423
207,423
Retained earnings
279,156
287,128
Total equity attributable to shareholders of the Company
729,179
739,169
Minority interests
140,381
137,736
Total shareholders' equity
869,560
876,905
Total liabilities and shareholders' equity
1,799,388
1,755,071
Zhang Yuzhuo Ma Yongsheng
Shou Donghua
Chairman President Chief Financial Officer
Balance Sheet
as at 30 September 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
At 30 September 2020
At 31 December 2019
Current assets:
Cash at bank and on hand
97,425
54,072
Derivative financial assets
-
940
Accounts receivable
16,971
21,544
Receivables financing
360
207
Prepayments
2,850
2,665
Other receivables
73,717
78,872
Inventories
52,390
49,116
Other current assets
12,522
25,149
Total current assets
256,235
232,565
Non-current assets:
Long-term equity investments
335,272
304,687
Other equity instrument investments
427
395
Fixed assets
283,270
291,547
Construction in progress
59,548
60,493
Right-of-use assets
109,882
112,832
Intangible assets
8,620
8,809
Long-term deferred expenses
2,509
2,630
Deferred tax assets
12,441
7,315
Other non-current assets
8,232
2,490
Total non-current assets
820,201
791,198
Total assets
1,076,436
1,023,763
Current liabilities:
Short-term loans
27,649
19,919
Derivative financial liabilities
-
157
Bills payable
6,625
4,766
Accounts payable
70,621
75,352
Contract liabilities
4,955
5,112
Employee benefits payable
7,415
1,214
Taxes payable
23,921
43,025
Other payables
161,412
118,064
Non-current liabilities due within one year
49,045
59,596
Other current liabilities
11,513
-
Total current liabilities
363,156
327,205
Non-current liabilities:
Long-term loans
33,002
12,680
Debentures payable
26,976
7,000
Lease liabilities
106,752
107,783
Provisions
35,650
34,514
Other non-current liabilities
4,575
4,471
Total non-current liabilities
206,955
166,448
Total liabilities
570,111
493,653
Shareholders' equity:
Share capital
121,071
121,071
Capital reserve
68,838
68,841
Other comprehensive income
(1,451)
1,181
Specific reserve
1,411
949
Surplus reserves
207,423
207,423
Retained earnings
109,033
130,645
Total shareholders' equity
506,325
530,110
Total liabilities and shareholders' equity
1,076,436
1,023,763
Zhang Yuzhuo Ma Yongsheng Shou Donghua
Chairman President Chief Financial Officer
Consolidated Income Statement
for the nine-month period ended 30 September 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month
period
ended 30
September
2020
Three-month
period
ended 30
September
2019
Nine-month period
ended 30 September
2020
Nine-month period
ended 30 September
2019
I. Operating income
520,371
734,309
1,554,617
2,233,305
II. Total Operating costs
494,951
718,620
1,553,444
2,172,237
Including: Operating costs
392,164
617,990
1,268,329
1,881,083
Taxes and surcharges
64,034
61,685
171,877
181,931
Selling and distribution expenses
15,906
16,021
45,389
45,761
General and administrative expenses
15,922
16,079
46,943
43,118
Research and development costs
3,147
1,942
7,448
5,931
Financial expenses
2,134
2,627
7,349
7,790
Exploration expenses,
including dry holes
1,644
2,276
6,109
6,623
Add: Other income
1,986
1,074
4,448
2,674
Investment income
36,420
3,701
42,051
6,475
Gains/(losses) from
changes in fair value
1,628
(1,120)
1,738
(1,426)
Credit impairment losses
(741)
6
(842)
(7)
Impairment losses
252
(9)
(11,415)
(91)
Asset disposal gains/(losses)
480
5
569
(169)
III. Operating profit
65,445
19,346
37,722
68,524
Add: Non-operating income
497
366
1,180
1,051
Less: Non-operating expenses
904
476
1,876
1,243
IV. Profit before taxation
65,038
19,236
37,026
68,332
Less: Income tax expense
11,814
3,728
6,012
13,868
V. Net profit
53,224
15,508
31,014
54,464
Classification by going concern:
(i) Continuous operating net profit
53,224
15,508
31,014
54,464
(ii) Termination of net profit
-
-
-
-
Classification by ownership:
(i)Equity shareholders of the
Company
46,389
11,943
23,507
43,281
(ii) Minority interests
6,835
3,565
7,507
11,183
VI. Other comprehensive income
(978)
1,663
(3,390)
6,231
Items that may not be reclassified subsequently to profit or loss:
(1)
(2)
(31)
(22)
Changes in fair value of other equity instrument investments
(1)
(2)
(31)
(22)
Items that may be reclassified subsequently to profit or loss:
(977)
1,665
(3,359)
6,253
Other comprehensive loss that can be converted into profit or loss under the equity method
(485)
(98)
(2,266)
(607)
Cash flow hedges
2,000
(248)
340
4,543
Foreign currency translation differences
(2,492)
2,011
(1,433)
2,317
VII. Total comprehensive income
52,246
17,171
27,624
60,695
Attributable to:
Equity shareholders of the Company
45,834
12,926
20,739
48,842
Minority interests
6,412
4,245
6,885
11,853
VIII. Earnings per share:
(i) Basic earnings per share
(RMB/Share)
0.383
0.099
0.194
0.357
(ii) Diluted earnings per
share (RMB/Share)
0.383
0.099
0.194
0.357
Zhang Yuzhuo Ma Yongsheng Shou Donghua
Chairman President Chief Financial Officer
Income Statement
for the nine-month period ended 30 September 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month
period
ended 30
September
2020
Three-month
period
ended 30
September
2019
Nine-month period
ended 30 September 2020
Nine-month period
ended 30 September 2019
I. Operating income
199,451
254,297
558,026
766,632
Less: Operating costs
142,631
201,259
430,434
605,829
Taxes and surcharges
40,363
41,484
110,502
123,434
Selling and distribution expenses
794
942
2,269
2,492
General and administrative expenses
6,675
7,151
21,681
18,318
Research and development costs
2,918
1,789
6,968
5,516
Financial expenses
2,167
1,947
6,701
5,860
Exploration expenses,
including dry holes
1,466
2,138
5,176
6,159
Add: Other income
1,264
564
3,158
1,455
Investment income
30,272
5,599
36,871
16,404
(Losses)/gains from changes in
fair value
(2)
-
358
20
Credit impairment losses
21
10
51
18
Impairment losses
101
(2)
(7,993)
(1)
Asset disposal gains
16
6,963
29
6,984
II. Operating profit
34,109
10,721
6,769
23,904
Add: Non-operating income
100
86
203
197
Less: Non-operating expenses
336
258
780
535
III. Profit before taxation
33,873
10,549
6,192
23,566
Less: Income tax (credit)/expense
4,449
1,163
(3,675)
1,673
IV. Net profit
29,424
9,386
9,867
21,893
(i) Continuous operating net profit
29,424
9,386
9,867
21,893
(ii) Termination of net profit
-
-
-
-
V. Other comprehensive income
51
113
(2,634)
899
Items that may be reclassified subsequently to profit or loss
51
113
(2,634)
899
Other comprehensive income that can be converted into profit or loss under the equity method
(210)
112
(304)
139
Cash flow hedges
261
1
(2,330)
760
VI. Total comprehensive income
29,475
9,499
7,233
22,792
Zhang Yuzhuo Ma Yongsheng Shou Donghua
Chairman President Chief Financial Officer
Consolidated Cash Flow Statement
for the nine-month period ended 30 September 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Nine-month period
ended 30 September 2020
Nine-month period
ended 30 September 2019
I. Cash flows from operating activities:
Cash received from sale of goods and
rendering of services
1,709,099
2,366,716
Refund of taxes and levies
2,729
1,446
Other cash received relating to operating
activities
156,475
102,241
Sub-total of cash inflows
1,868,303
2,470,403
Cash paid for goods and services
(1,317,936)
(1,925,742)
Cash paid to and for employees
(50,974)
(51,592)
Payments of taxes and levies
(234,913)
(280,179)
Other cash paid relating to operating
activities
(180,841)
(131,492)
Sub-total of cash outflows
(1,784,664)
(2,389,005)
Net cash flow from operating activities
83,639
81,398
II. Cash flows from investing activities:
Cash received from disposal of investments
7,962
19,455
Cash received from returns on investments
6,746
8,173
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
1,896
433
Net cash received from disposal of subsidiaries and other business entities
48
-
Other cash received relating to investing
activities
41,758
67,954
Sub-total of cash inflows
58,410
96,015
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
(80,972)
(73,910)
Cash paid for acquisition of investments
(7,407)
(14,296)
Other cash paid relating to investing
activities
(73,295)
(78,561)
Sub-total of cash outflows
(161,674)
(166,767)
Net cash flow from investing activities
(103,264)
(70,752)
III. Cash flows from financing activities:
Cash received from capital contributions
3,395
2,222
Including: Cash received from minority shareholders' capital contributions to subsidiaries
3,395
2,198
Cash received from borrowings
489,892
469,696
Other cash received relating to financing activities
752
322
Sub-total of cash inflows
494,039
472,240
Cash repayments of borrowings
(405,196)
(441,579)
Cash paid for dividends, profits
distribution or interest
(31,000)
(55,447)
Including: Subsidiaries' cash payments for distribution of dividends or profits to minority shareholders
(3,482)
(4,659)
Other cash paid relating to financing
activities
(10,987)
(9,245)
Sub-total of cash outflows
(447,183)
(506,271)
Net cash flow from financing activities
46,856
(34,031)
IV. Effects of changes in foreign exchange rate
(458)
313
V. Net increase/(decrease) in cash and cash equivalents
26,773
(23,072)
Add:Initial balance of cash and cash equivalents
60,313
111,922
VI. Ending balance of cash and cash equivalents
87,086
88,850
Zhang Yuzhuo Ma Yongsheng Shou Donghua
Chairman President Chief Financial Officer
Cash Flow Statement
for the nine-month period ended 30 September 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Nine-month period
ended 30 September 2020
Nine-month period
ended 30 September 2019
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services
628,381
889,797
Refund of taxes and levies
2,428
947
Other cash received relating to operating activities
3,458
5,062
Sub-total of cash inflows
634,267
895,806
Cash paid for goods and services
(408,733)
(652,604)
Cash paid to and for employees
(26,693)
(26,693)
Payments of taxes and levies
(138,726)
(186,228)
Other cash paid relating to operating activities
(11,772)
(6,888)
Sub-total of cash outflows
(585,924)
(872,413)
Net cash flow from operating activities
48,343
23,393
II.Cash flows from investing activities:
Cash received from disposal of investments
12,587
16,650
Cash received from returns on investments
14,860
16,510
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
6,558
18
Other cash received relating to investing activities
99,053
22,382
Sub-total of cash inflows
133,058
55,560
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
(35,223)
(47,047)
Cash paid for acquisition of investments
(15,484)
(8,338)
Other cash paid relating to investing activities
(118,376)
(36,900)
Sub-total of cash outflows
(169,083)
(92,285)
Net cash flow from investing activities
(36,025)
(36,725)
III.Cash flows from financing activities:
Cash received from borrowings
194,538
91,665
Other cash received relating to financing activities
164,714
69,218
Sub-total of cash inflows
359,252
160,883
Cash repayments of borrowings
(140,761)
(67,587)
Cash paid for dividends or interest
(26,661)
(47,149)
Other cash paid relating to financing activities
(186,971)
(58,570)
Sub-total of cash outflows
(354,393)
(173,306)
Net cash flow from financing activities
4,859
(12,423)
IV. Effects of changes in foreign exchange rate
(2)
-
V. Net increase/(decrease) in cash and cash equivalents
17,175
(25,755)
Add:Initial balance of cash and cash equivalents
38,616
59,120
VI. Ending balance of cash and cash equivalents
55,791
33,365
Zhang Yuzhuo Ma Yongsheng Shou Donghua
Chairman President Chief Financial Officer
Segment Reporting
for the nine-month period ended 30 September 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Nine-month period
ended 30 September 2020
Nine-month period
ended 30 September 2019
Income from principal operations
Exploration and production
External sales
71,021
79,424
Inter-segment sales
44,839
66,262
Subtotal
115,860
145,686
Refining
External sales
80,776
105,986
Inter-segment sales
603,290
801,310
Subtotal
684,066
907,296
Marketing and distribution
External sales
788,857
1,030,178
Inter-segment sales
3,491
2,719
Subtotal
792,348
1,032,897
Chemicals
External sales
231,771
327,637
Inter-segment sales
29,098
42,508
Subtotal
260,869
370,145
Corporate and others
External sales
352,212
641,791
Inter-segment sales
331,577
473,187
Subtotal
683,789
1,114,978
Elimination of inter-segment sales
(1,023,982)
(1,385,986)
Consolidated income from principal operations
1,512,950
2,185,016
Income from other operations
Exploration and production
4,494
6,722
Refining
3,219
3,829
Marketing and distribution
26,052
25,436
Chemicals
6,389
10,912
Corporate and others
1,513
1,390
Consolidated income from other operations
41,667
48,289
Consolidated operating income
1,554,617
2,233,305
Operating (loss)/ profit
By segment
Exploration and production
(9,726)
7,295
Refining
(15,884)
21,445
Marketing and distribution
14,634
23,139
Chemicals
6,503
16,059
Corporate and others
(4,378)
1,066
Elimination
5,116
(244)
Total segment operating (loss)/profit
(3,735)
68,760
Investment income
Exploration and production
14,413
2,398
Refining
13,251
(767)
Marketing and distribution
11,268
2,291
Chemicals
(34)
3,227
Corporate and others
3,153
(674)
Total segment investment income
42,051
6,475
Financial expenses
(7,349)
(7,790)
Gain/(loss) from changes in fair value
1,738
(1,426)
Asset disposal gains/(losses)
569
(169)
Other income
4,448
2,674
Operating profit
37,722
68,524
Add: Non-operating income
1,180
1,051
Less: Non-operating expenses
1,876
1,243
Profit before taxation
37,026
68,332
4.2 Quarterly financial statements prepared under International Financial Reporting
Standards (IFRS)
Consolidated Income Statement
for the nine-month period ended 30 September 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month
period
ended 30
September
2020
Three-month
period
ended 30
September
2019
Nine-month period
ended 30 September 2020
Nine-month period
ended 30 September 2019
Turnover and other operating revenues
Turnover
504,951
718,183
1,512,950
2,185,016
Other operating revenues
15,420
16,126
41,667
48,289
Subtotal
520,371
734,309
1,554,617
2,233,305
Operating expenses
Purchased crude oil, products and operating supplies and expenses
(365,143)
(591,303)
(1,202,853)
(1,798,485)
Selling, general and administrative expenses
(14,270)
(13,269)
(38,688)
(38,034)
Depreciation, depletion and amortization
(26,176)
(26,387)
(77,470)
(79,071)
Exploration expenses, including dry holes
(1,644)
(2,276)
(6,109)
(6,623)
Personnel expenses
(22,142)
(20,936)
(60,032)
(59,157)
Taxes other than income tax
(64,034)
(61,685)
(171,877)
(181,931)
Other operating (expense)/ income, net
(433)
749
7,440
(1,664)
Total operating expenses
(493,842)
(715,107)
(1,549,589)
(2,164,965)
Operating profit
26,529
19,202
5,028
68,340
Finance costs
Interest expense
(3,838)
(4,341)
(11,871)
(13,261)
Interest income
1,356
1,804
3,621
5,665
Foreign currency exchange gains/(losses), net
348
(90)
901
(194)
Net finance costs
(2,134)
(2,627)
(7,349)
(7,790)
Investment income
38,719
25
38,784
256
Share of profits less losses from associates and joint ventures
1,716
2,745
1,724
8,620
Profit before taxation
64,830
19,345
38,187
69,426
Income tax expense
(11,814)
(3,728)
(6,012)
(13,868)
Profit for the period
53,016
15,617
32,175
55,558
Attributable to:
Shareholders of the Company
46,184
12,020
24,459
44,226
Non-controlling interests
6,832
3,597
7,716
11,332
Profit for the period
53,016
15,617
32,175
55,558
Earnings per share
Basic earnings per share (RMB)
0.381
0.099
0.202
0.365
Diluted earnings per share (RMB)
0.381
0.099
0.202
0.365
Consolidated Statement of Comprehensive Income
for the nine-month period ended 30 September 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Three-month
period
ended 30
September
2020
Three-month
period
ended 30
September
2019
Nine-month period ended 30 September 2020
Nine-month period ended 30 September 2019
Profit for the period
53,016
15,617
32,175
55,558
Other comprehensive income:
(978)
1,663
(3,390)
6,231
Items that may not be reclassified subsequently to profit or loss:
Equity investments at fair value through other comprehensive income
(1)
(2)
(31)
(22)
Items that may be reclassified subsequently to profit or loss:
Cash flow hedges
2,000
(248)
340
4,543
Share of other comprehensive loss of associates and joint ventures
(485)
(98)
(2,266)
(607)
Foreign currency translation differences
(2,492)
2,011
(1,433)
2,317
Total comprehensive income
52,038
17,280
28,785
61,789
Attributable to:
Shareholders of the Company
45,629
13,003
21,691
49,787
Non-controlling interests
6,409
4,277
7,094
12,002
Consolidated Balance Sheet
as at 30 September 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
At 30 September 2020
At 31 December 2019
Non-current assets:
Property, plant and equipment, net
553,825
622,409
Construction in progress
141,068
173,482
Right-of-use assets
263,747
267,860
Goodwill
8,679
8,697
Interest in associates
137,289
95,737
Interest in joint ventures
53,184
56,467
Financial assets at fair value through other
comprehensive income
1,519
1,521
Deferred tax assets
24,065
17,616
Long-term prepayments and other non-current assets
65,031
65,426
Total non-current assets
1,248,407
1,309,215
Current assets:
Cash and cash equivalents
87,086
60,313
Time deposits with financial institutions
92,859
67,614
Financial assets at fair value through profit and loss
1,427
3,319
Derivatives financial assets
7,875
837
Trade accounts receivable
43,919
54,865
Financial assets at fair value through other comprehensive income
10,040
8,622
Inventories
173,051
192,442
Prepaid expenses and other current assets
134,724
57,844
Total current assets
550,981
445,856
Current liabilities:
Short-term debts
45,566
40,521
Loans from Sinopec Group Company and fellow subsidiaries
50,468
43,289
Lease liabilities
15,190
15,198
Derivatives financial liabilities
13,580
2,729
Trade accounts payable and bills payable
174,016
199,792
Contract liabilities
136,947
126,735
Other payables
159,810
144,846
Income tax payable
6,062
3,264
Total current liabilities
601,639
576,374
Net current liabilities
50,658
130,518
Total assets less current liabilities
1,197,749
1,178,697
Non-current liabilities:
Long-term debts
72,756
49,156
Loans from Sinopec Group Company and fellow subsidiaries
9,108
9,626
Lease liabilities
173,945
177,674
Deferred tax liabilities
7,880
6,809
Provisions
44,086
43,163
Other non-current liabilities
21,444
16,434
Total non-current liabilities
329,219
302,862
Total net assets
868,530
875,835
Equity:
Share capital
121,071
121,071
Reserves
607,127
617,079
Total equity attributable to shareholders of the Company
728,198
738,150
Non-controlling interests
140,332
137,685
Total equity
868,530
875,835
Consolidated Statement of Cash Flows
for the nine-month period ended 30 September 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Nine-month period ended 30 September 2020
Nine-month period ended 30 September 2019
Net cash generated from operating activities(a)
83,639
81,398
Investing activities
Capital expenditure
(72,775)
(67,186)
Exploratory wells expenditure
(8,197)
(6,724)
Purchase of investments, investments in associates and
investments in joint ventures
(2,707)
(4,096)
Payments for financial assets at fair value through profit or loss
(4,700)
(10,200)
Proceeds from sale of financial assets at fair value through profit or loss
6,600
25,350
Proceeds from disposal of investments and investments in associates
1,410
805
Proceeds from disposal of property, plant, equipment and other non-current assets
1,896
433
Increase in time deposits with maturities over three months
(64,876)
(77,339)
Decrease in time deposits with maturities over three months
39,131
56,107
Interest received
2,627
3,925
Investment and dividend income received
6,746
8,173
Repayments of other investing activities
(8,419)
-
Net cash used in investing activities
(103,264)
(70,752)
Financing activities
Proceeds from bank and other loans
489,892
469,696
Repayments of bank and other loans
(405,196)
(441,579)
Contributions to subsidiaries from non-controlling interests
3,395
2,222
Dividends paid by the Company
(23,004)
(46,007)
Distributions by subsidiaries to non-controlling interests
(3,482)
(4,659)
Interest paid
(4,514)
(4,781)
Payments made to acquire non-controlling interests
(1,117)
-
Repayments of lease liabilities
(9,514)
(9,173)
Proceeds from other financing activities
752
250
Repayments of other financing activities
(356)
-
Net cash used in financing activities
46,856
(34,031)
Net increase/(decrease) in cash and cash equivalents
27,231
(23,385)
Cash and cash equivalents at 1 January
60,313
111,922
Effect of foreign currency exchange rate changes
(458)
313
Cash and cash equivalents at 30 September
87,086
88,850
Note to consolidated statement of Cash Flows
for the nine-month period ended 30 September 2020
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
Nine-month period ended 30 September 2020
Nine-month period ended 30 September 2019
Operating activities
Profit before taxation
38,187
69,426
Adjustments for:
Depreciation, depletion and amortization
77,470
79,071
Dry hole costs written off
4,516
4,553
Share of profits from associates and joint ventures
(1,724)
(8,620)
Investment income
(38,784)
(256)
Interest income
(2,358)
(5,665)
Interest expense
11,217
13,261
(Gain)/loss on foreign currency exchange rate changes and derivative financial instruments
(2,180)
430
(Gain)/loss on disposal of property, plant, equipment and other non-current assets, net
(67)
248
Impairment losses on assets
11,415
91
Credit impairment losses
842
7
Operating profit before change of operating capital
98,534
152,546
Accounts receivable and other current assets
3,636
(22,910)
Inventories
8,062
(14,055)
Accounts payable and other current liabilities
(16,484)
(19,003)
Subtotal
93,748
96,578
Income tax paid
(10,109)
(15,180)
Net cash generated from operating activities
83,639
81,398
Segment Reporting
for the nine-month period ended 30 September 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Nine-month period ended 30 September 2020
Nine-month period ended 30 September 2019
Turnover
Exploration and production
External sales
71,021
79,424
Inter-segment sales
44,839
66,262
Subtotal
115,860
145,686
Refining
External sales
80,776
105,986
Inter-segment sales
603,290
801,310
Subtotal
684,066
907,296
Marketing and distribution
External sales
788,857
1,030,178
Inter-segment sales
3,491
2,719
Subtotal
792,348
1,032,897
Chemicals
External sales
231,771
327,637
Inter-segment sales
29,098
42,508
Subtotal
260,869
370,145
Corporate and others
External sales
352,212
641,791
Inter-segment sales
331,577
473,187
Subtotal
683,789
1,114,978
Elimination of inter-segment sales
(1,023,982)
(1,385,986)
Turnover
1,512,950
2,185,016
Other operating revenues
Exploration and production
4,494
6,722
Refining
3,219
3,829
Marketing and distribution
26,052
25,436
Chemicals
6,389
10,912
Corporate and others
1,513
1,390
Other operating revenues
41,667
48,289
Turnover and other operating revenues
1,554,617
2,233,305
Result
Operating (loss)/profit
By segment
Exploration and production
(6,479)
8,718
Refining
(15,098)
22,500
Marketing and distribution
16,958
23,245
Chemicals
7,047
16,560
Corporate and others
(2,516)
(2,439)
Elimination
5,116
(244)
Total segment operating profit
5,028
68,340
Share of profits from associates and joint ventures
Exploration and production
1,208
2,256
Refining
(2,177)
(802)
Marketing and distribution
1,171
2,337
Chemicals
(40)
3,237
Corporate and others
1,562
1,592
Aggregate share of profits from associates and joint ventures
1,724
8,620
Investment income/(losses)
Exploration and production
13,205
(3)
Refining
15,389
35
Marketing and distribution
9,092
63
Chemicals
4
2
Corporate and others
1,094
159
Aggregate investment income
38,784
256
Net finance costs
(7,349)
(7,790)
Profit before taxation
38,187
69,426
4.3 Differences between Consolidated Financial Statements prepared in accordance 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 recognized 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 recognized 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
Nine-month period ended 30 September 2020
Nine-month period ended 30 September 2019
Net profit under CASs
31,014
54,464
Adjustments:
Government grants (i)
40
42
Safety production fund (ii)
1,126
1,229
Others
(5)
(177)
Profit for the period under IFRS
32,175
55,558
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
At 30 September 2020
At 31 December 2019
Shareholders' equity under CASs
869,560
876,905
Adjustments:
Government grants(i)
(1,030)
(1,070)
Total equity under IFRS
868,530
875,835
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