REG - China Pet &Chem Corp - 3rd Quarter Results
RNS Number : 5873QChina Petroleum & Chemical Corp28 October 2021
China Petroleum & Chemical Corporation
The Third Quarterly Report for 2021
28 October 2021
Beijing China
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 2021 was approved at the third meeting of the Eighth Session of the Board of Directors of Sinopec Corp. All directors attended this meeting.
1.3 Mr. Ma Yongsheng, Director and President and Ms. Shou Donghua, Chief Financial Officer and Head of 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.
1 Principal financial data
1.1 Principal financial data and indicators prepared in accordance with China Accounting Standards for Business Enterprises (CASs)
RMB million
As of 30
September 2021
As of 31
December 2020
(adjusted)
As of 31
December 2020
(before adjustment)
Changes from the end of last year(%)
Total assets
1,887,282
1,734,445
1,733,805
8.8
Total equity attributable to equity shareholders of the Company
769,346
742,885
742,463
3.6
RMB million
Nine-month period ended 30 September
Changes over the same period of
the preceding year(%)
2021
2020
(adjusted)
2020
(before
adjustment)
Net cash flow from operating activities
115,723
84,230
83,639
37.4
Operating income
2,003,350
1,552,536
1,554,617
29.0
Net profit attributable to equity shareholders of the Company
59,892
23,492
23,507
154.9
Net profit/(losses) attributable to equity shareholders of the Company excluding extraordinary gains and losses
58,720
(10,243)
(10,257)
-
Weighted average return on net assets (%)
7.92
3.20
3.18
4.72
percentage points
Basic earnings per share(RMB)
0.495
0.194
0.194
155.2
Diluted earnings per share(RMB)
0.495
0.194
0.194
155.2
Note: The Company has completed the formation of Sinopec Baling Petrochemical Co. Ltd on 1 November 2020, and has completed the purchase of non-equity assets of Beihai Petrochemical Limited Liability Company of Sinopec Group, Cangzhou branch of Sinopec Group Asset Management Co., Ltd and Beijing Orient Petrochemical Industry Co., Ltd on 1 July 2021. The business reorganisation and transactions have been accounted as business combination under common control. Accordingly, the Company has retrospectively adjusted the relevant financial data.
RMB million
Extraordinary items
Third Quarter of 2021
(gain)/loss
Nine-months period ended 30 September 2021
RMB million
(gain)/loss
Net gain on disposal of non-current assets
(152)
(433)
Donations
64
72
Government grants
(445)
(1,994)
Gains on holding and disposal of various investments
(52)
(218)
Other extraordinary income and expenses, net
127
817
Net gain and loss of acquiree before business combination under common control
-
(103)
Subtotal
(458)
(1,859)
Tax effect
38
455
Total
(420)
(1,404)
Attributable to:
Equity shareholders of the Company
(365)
(1,172)
Minority interests
(55)
(232)
1.2 Principal financial data and indicators prepared in accordance with International Financial Reporting Standards (IFRs)
RMB million
Items
As of 30 September
2021
As of 31 December
2020
(adjusted)
As of 31 December
2020
(before adjustment)
Changes from the end of the last year (%)
Total assets
1,887,282
1,734,445
1,733,805
8.8
Total equity attributable to shareholders of the Company
768,412
741,916
741,494
3.6
RMB million
Nine-month period ended 30 September
Changes over the same period of the preceding year (%)
Items
2021
2020
(adjusted)
2020
(before adjustment)
Net cash generated from operating activities
115,723
84,230
83,639
37.4
Operating profit
84,806
5,053
5,028
1578.3
Net profit attributable to shareholders of the Company
60,755
24,445
24,459
148.5
Basic earnings per share (RMB)
0.502
0.202
0.202
148.5
Diluted earnings per share (RMB)
0.502
0.202
0.202
148.5
Return on net assets (%)
7.91
3.35
3.36
4.56
percentage points
Note: The Company has completed the formation of Sinopec Baling Petrochemical Co. Ltd on 1 November 2020, and has completed the purchase of non-equity assets of Beihai Petrochemical Limited Liability Company of Sinopec Group, Cangzhou branch of Sinopec Group Asset Management Co., Ltd and Beijing Orient Petrochemical Industry Co., Ltd on 1 July 2021. The business reorganisation and transactions have been accounted as business combination under common control. Accordingly, the Company has retrospectively adjusted the relevant financial data.
1.3 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 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
3,492
1
3,491
349,100
Increase in structured deposits of the subsidiaries of the Company
Derivative financial assets
32,464
12,528
19,936
159
Increase in profit position of derivative hedging financial instruments
Derivative financial liabilities
8,949
4,826
4,123
85
Accounts receivable
73,568
35,584
37,984
107
Due to the increase in prices of crude oil and refined oil products, accounts receivable and accounts payable generated from relative business increased
Accounts payable
215,846
151,329
64,517
43
Prepayments
13,782
4,857
8,925
184
Increase in prepayment of land bidding and large-scale equipment
Inventory
198,109
151,951
46,158
30
Increase in inventory value of crude oil and refined oil products due to the increase in international crude oil prices
Short-term loans
37,562
20,756
16,806
81
Increase in low-interest loans of some subsidiaries for liquidity
Bills payable
15,560
10,394
5,166
50
Increase in bills payable as a result of enhanced management of funds occupancy
Other current liabilities
32,183
17,775
14,408
81
Increased 17 billion ultra-short debentures during the reporting period
Other comprehensive income
4,269
1,038
3,231
311
Increase in profit of hedging business
Specific reserve
2,769
1,941
828
43
The provision of safety production fund
Items of Consolidated Income Statement
Nine-month period ended 30 September
2021
Nine-month period ended 30 September
2020
Increase/(Decrease)
Main reasons for changes
Amount
Percentage
RMB
Million
RMB
Million
RMB Million
(%)
Other income
1,671
4,458
(2,787)
(63)
Decrease in VAT refund of imported LNG
Credit impairment losses
(140)
(842)
702
-
Decrease in losses of doubtful accounts
Investment income
9,520
42,057
(32,537)
(77)
Received income of pipeline transaction in the same period of 2020 and no such item in 2021; meanwhile margin of refined oil products recovered and profits of associates and joint ventures significantly increased
Income tax expense
20,948
6,045
14,903
247
Increase in income tax as a result of significant increase in profit before taxation
Items of Consolidated Cash Flow Statement
Nine-month period ended 30 September
2021
Nine-month period ended 30 September
2020
Increase/(Decrease)
Main reasons for changes
Amount
Percentage
RMB
Million
RMB
Million
RMB
Million
(%)
Refund of taxes and levies
934
2,733
(1,799)
(66)
Decrease in VAT refund of imported LNG
Net cash received from disposal of subsidiaries and other business entities
4,764
48
4,716
9,825
Balance payment of pipeline transaction in 2020 received in the reporting period
Other cash received relating to investing activities
26,431
41,758
(15,327)
(37)
Decrease in time deposits with maturities over three months
Cash paid for dividends, profits distribution or interest
(44,039)
(31,079)
(12,960)
-
Increase in cash payment of dividends in the reporting period
2 Shareholders information
2.1Total 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 497,430, including 491,832 holders of domestic A shares and 5,598 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
25,386,239,460
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
1,072,676,699
0.89
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
中央汇金资产管理有限责任公司
322,037,900
0.27
0
A share
国信证券股份有限公司
211,476,986
0.17
0
A share
中国人寿保险股份有限公司-分红-个人分红-005L-FH002沪
98,846,027
0.08
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
94,764,676
0.08
0
A share
全国社保基金一一三组合
88,106,057
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, 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-传统-普通保险产品-005L-CT001沪 and 中国人寿保险股份有限公司-分红-个人分红-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.
3 Review of operating results
In the first three quarters of 2021, as the world economy gradually picked up, China's economy kept a sustainable and steady recovery, registering a GDP growth of 9.8% year-on-year among which up by 4.9% in the third quarter. In the first three quarters, the average spot price of Platts Brent was USD67.73 per barrel, up by 65.9% year-on-year. Domestic demand for natural gas continued to grow rapidly, with an apparent consumption up by 16.6% year-on-year. Domestic demand for refined oil products recovered steadily and demand for major chemicals kept stable.
Confronted with the environment where the international oil price went up and the demand for petrochemical products recovered steadily, the Company stressed on improving our systems, expanding markets, and controlling costs, thus realising outstanding operation results.
In accordance with CASs, net profit attributable to equity shareholders of the Company was RMB 59.892 billion, up by 154.9% year-on-year. In accordance with IFRS, net profit attributable to equity shareholders of the Company was RMB 60.755 billion, up by 148.5% year-on-year.
Exploration and Production: The Company seized the favourable opportunity of rising oil prices, pressed ahead with high-quality exploration and profit-oriented development, strengthened the foundation of resources. In terms of exploration, we strengthened risk exploration in new regions and new sectors, which led to new discoveries in Tarim Basin, Sichuan Basin, and Erdos Basin, and major breakthroughs in continental facies shale oilfields of Bohai Bay Basin, Sichuan Basin, and North Jiangsu Basin. In terms of production, we efficiently proceeded with the capacity building of major natural gas and crude oil projects, and the natural gas production increased by 13.7% year-on-year and the crude oil production kept stable. The exploration and production segment realised earnings before interest and taxes (EBIT) of RMB 10.904 billion in the first three quarters.
Exploration and Production
Unit
Nine-month period ended 30 September
Changes
2021
2020
(%)
Oil and gas production
million boe
355.01
339.39
4.6
Crude oil production
million barrels
208.65
210.65
(0.9)
China
million barrels
186.59
186.69
(0.1)
Overseas
million barrels
22.06
23.96
(7.9)
Natural gas production
billion cubic feet
877.85
772.14
13.7
Realised crude oil price
USD/barrel
60.94
38.24
59.4
Realised natural gas price
USD/thousand cubic feet
6.74
5.32
26.7
Conversion: For domestic production of crude oil, 1 tonne = 7.10 barrels. For overseas production of crude oil,
1 tonne = 7.21 barrels. For production of natural gas, 1 cubic meter = 35.31 cubic feet.
Refining: The Company actively responded to market changes, strengthened integration of refining and marketing, raised processing volume, kept high utilisation rate, actively adjusted product slate and maximised profits along the industrial chain. We optimised crude oil allocation and cut procurement costs. We insisted on the strategy of shifting from oil to chemicals, lowered refined oil products yield, and increased production of readily marketable products like gasoline and light chemical feedstock. We increased production of high value-added products and specialty products, built 6 sets of hydrogen purification units, developed high-end needle-shaped coke products and domestic market share of low-sulphur bunker fuel ranked the first. We expedited advanced capacity building and pushed ahead with restructuring projects. In the first three quarters of 2021, the Company processed 191 million tonnes of crude oil, up by 9.3% year-on-year, and produced 109 million tonnes of refined oil products, up by 3.2% year-on-year. The refining segment realised EBIT of RMB 54.268 billion in the first three quarters.
Refining
Unit
Nine-month period ended 30 September
Changes
2021
2020
(%)
Refinery throughput
million tonnes
190.73
174.46
9.3
Gasoline, diesel and kerosene production
million tonnes
108.60
105.19
3.2
Gasoline
million tonnes
49.07
42.46
15.6
Diesel
million tonnes
42.92
47.86
(10.3)
Kerosene
million tonnes
16.60
14.87
11.6
Light chemical feedstock production
million tonnes
33.71
29.54
14.1
Light product yield
%
73.72
74.63
(0.91) percentage points
Refining yield
%
94.71
94.89
(0.18) percentage points
Marketing and Distribution: The Company leveraged our advantages of integration of refining and marketing to expand markets and adopted targeted marketing strategy, resulting in an elevation of scale. We consolidated our resources of customers and marketing throughout the country, and continuously improved the quality of our services. We optimised the network layout to reach end users, accelerated the construction of integrated energy service stations offering petrol, gas, hydrogen, power, and non-fuel services, and put our first carbon-neutral station and BIPV (building integrated photo-voltaic) station into operation. In the first three quarters, total sales volume of refined oil products was 166.59 million tonnes, among which total domestic sales volume of refined oil products was 127.88 million tonnes, up by 3.8% year-on-year. The Company strengthened the development and marketing of company-owned brands, actively explored emerging business models such as car services, fast food, and advertising, and speed up the development of non-fuel businesses. The marketing and distribution segment realised EBIT of RMB 24.316 billion in the first three quarters.
Marketing and Distribution
Unit
Nine-month period ended 30 September
Changes
2021
2020
(%)
Total sales volume of refined oil products
million tonnes
166.59
162.25
2.7
Total domestic sales volume of refined oil products
million tonnes
127.88
123.19
3.8
Retail
million tonnes
83.70
83.06
0.8
Direct sales & Distribution
million tonnes
44.18
40.13
10.1
Annualised average throughput per station
tonnes/station
3,633
3,605
0.8
Chemicals: By adhering to "following the market and centering on profits", the Company sped up the advanced capacity building and structural adjustment. We fine-tuned chemical feedstock to reduce costs; we adjusted the structure of the facilities and optimised maintenance schedule to raise the utilisation of profitable facilities; we enhanced integration of production, marketing and research and continuously increased the ratio of high value-added products, raising the ratio of synthetic resin, synthetic rubber, and synthetic fibre by 1.4, 3.7 and 1.6 percentage points respectively year-on-year. In the first three quarters, ethylene production reached 9.75 million tonnes, up by 10.2% year-on-year. Meanwhile, we scored achievements in key clients management, scaled up profit generation through exports, and launched self-marketing products on e-commerce. The total sales volume of chemical products for the first three quarters was 60.77 million tonnes. The chemicals segment realised EBIT of RMB 23.064 billion in the first three quarters.
Chemicals
Unit
Nine-month period ended 30 September
Changes
2021
2020
(%)
Ethylene
thousand tonnes
9,752
8,850
10.2
Synthetic resin
thousand tonnes
14,002
12,773
9.6
Monomers and polymers for synthetic fibre
thousand tonnes
6,820
6,711
1.6
Synthetic fibre
thousand tonnes
1,032
935
10.4
Synthetic rubber
thousand tonnes
891
790
12.8
Note : Including 100% production of domestic joint ventures.
Capital expenditures:
Focusing on investment quality and profitability, the Company optimised its investment management system, with total capital expenditures of RMB89.7 billion in the first three quarters of 2021. The capital expenditure for exploration and production segment was RMB38.6 billion, mainly for the capacity building of Shunbei oilfield, Weirong, Fuling, and Western Sichuan natural gas projects, and the construction of storage and transportation facilities for phase II of Tianjin LNG project, etc. The capital expenditure for the refining segment was RMB10.6 billion, mainly for the refining structural upgrading projects in Zhenhai and Anqing, and construction of hydrogen purification project, etc. The capital expenditure for the marketing and distribution segment was RMB9.9 billion, mainly for building oil (gas) stations, integrated energy service stations offering petrol, gas, hydrogen, power, and services and logistics facilities, etc. The capital expenditure for the chemicals segment was RMB29.7 billion, mainly for Zhenhai, Sino-Korea, Hainan and Tianjin ethylene projects, the overseas AGCC project, Jiujiang Aromatics project, Yizheng PTA project, etc. The capital expenditure for corporate and others was RMB900 million, mainly for R&D facilities and information technology projects, etc.
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
Ma Yongsheng
Director and President
28 October, 2021
4 Appendix
4.1 Quarterly financial statements prepared under China Accounting Standards for Business Enterprises (CASs)
Consolidated Balance Sheet
As at 30 September 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
At 30 September 2021
At 31 December 2020
Current assets:
Cash at bank and on hand
203,955
184,412
Financial assets held for trading
3,492
1
Derivative financial assets
32,464
12,528
Accounts receivable
73,568
35,584
Receivables financing
10,281
8,735
Prepayments
13,782
4,857
Other receivables
30,868
33,603
Inventories
198,109
151,951
Other current assets
18,143
23,773
Total current assets
584,662
455,444
Non-current assets:
Long-term equity investments
203,791
188,342
Other equity instrument investments
1,665
1,525
Fixed assets
580,641
589,730
Construction in progress
143,454
124,864
Right-of-use assets
187,027
189,583
Intangible assets
115,763
114,066
Goodwill
8,610
8,620
Long-term deferred expenses
9,793
9,580
Deferred tax assets
27,045
25,054
Other non-current assets
24,831
27,637
Total non-current assets
1,302,620
1,279,001
Total assets
1,887,282
1,734,445
Consolidated Balance Sheet (Continued)
Current liabilities:
Short-term loans
37,562
20,756
Derivative financial liabilities
8,949
4,826
Bills payable
15,560
10,394
Accounts payable
215,846
151,329
Contract liabilities
137,168
126,193
Employee benefits payable
21,039
7,083
Taxes payable
35,523
76,849
Other payables
104,116
84,705
Non-current liabilities due within one year
29,896
22,493
Other current liabilities
32,183
17,775
Total current liabilities
637,842
522,403
Non-current liabilities:
Long-term loans
49,167
45,459
Debentures payable
40,300
38,356
Lease liabilities
171,986
172,306
Provisions
46,570
45,552
Deferred tax liabilities
10,945
8,124
Other non-current liabilities
19,456
17,947
Total non-current liabilities
338,424
327,744
Total liabilities
976,266
850,147
Shareholders' equity:
Share capital
121,071
121,071
Capital reserve
120,674
123,808
Other comprehensive income
4,269
1,038
Specific reserve
2,769
1,941
Surplus reserves
209,280
209,280
Retained earnings
311,283
285,747
Total equity attributable to shareholders of the Company
769,346
742,885
Minority interests
141,670
141,413
Total shareholders' equity
911,016
884,298
Total liabilities and shareholders' equity
1,887,282
1,734,445
Ma Yongsheng Shou Donghua
Director, President Chief Financial Officer
Balance Sheet
As at 30 September 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
At 30 September 2021
At 31 December 2020
Current assets:
Cash at bank and on hand
94,267
99,188
Derivative financial assets
19,876
7,776
Accounts receivable
24,380
21,763
Receivables financing
1,260
707
Prepayments
6,304
2,626
Other receivables
35,412
37,938
Inventories
49,593
39,034
Other current assets
19,347
14,048
Total current assets
250,439
223,080
Non-current assets:
Long-term equity investments
354,437
343,356
Other equity instrument investments
428
428
Fixed assets
278,330
283,695
Construction in progress
61,548
59,880
Right-of-use assets
107,119
108,737
Intangible assets
8,613
8,779
Long-term deferred expenses
2,714
2,499
Deferred tax assets
14,277
12,661
Other non-current assets
34,885
26,828
Total non-current assets
862,351
846,863
Total assets
1,112,790
1,069,943
Current liabilities:
Short-term loans
20,890
20,669
Derivative financial liabilities
7,070
362
Bills payable
7,745
6,061
Accounts payable
79,474
65,779
Contract liabilities
6,932
5,840
Employee benefits payable
10,347
1,673
Taxes payable
19,919
43,500
Other payables
199,554
188,568
Non-current liabilities due within one year
19,069
12,026
Other current liabilities
17,533
439
Total current liabilities
388,533
344,917
Company Balance Sheet (Continued)
Non-current liabilities:
Long-term loans
33,983
30,413
Debentures payable
28,984
26,977
Lease liabilities
105,614
105,691
Provisions
37,142
36,089
Other non-current liabilities
3,484
3,581
Total non-current liabilities
209,207
202,751
Total liabilities
597,740
547,668
Shareholders' equity:
Share capital
121,071
121,071
Capital reserve
68,514
68,976
Other comprehensive income
10,486
5,910
Specific reserve
1,473
1,189
Surplus reserves
209,280
209,280
Retained earnings
104,226
115,849
Total shareholders' equity
515,050
522,275
Total liabilities and shareholders' equity
1,112,790
1,069,943
Ma Yongsheng Shou Donghua
Director, President Chief Financial Officer
Consolidated Income Statement
For the nine-month period ended 30 September 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
The third quarter of 2021 (July-September)
The third quarter of 2020 (July-September)
Nine-month period
ended 30 September 2021
Nine-month period
ended 30 September 2020
I. Operating income
741,638
519,420
2,003,350
1,552,536
II. Total Operating costs
714,981
493,877
1,918,388
1,551,429
Including: Operating costs
604,085
390,310
1,603,978
1,263,994
Taxes and surcharges
65,937
64,505
186,806
173,218
Selling and distribution expenses
16,611
15,926
48,330
45,451
General and administrative expenses
19,876
16,177
55,695
47,758
Research and development costs
2,952
3,159
8,311
7,478
Financial expenses
2,353
2,156
7,255
7,421
Including: Interest expenses
3,898
3,836
11,557
11,921
Interest income
1,459
1,357
4,121
3,624
Exploration expenses,
including dry holes
3,167
1,644
8,013
6,109
Add: Other income
427
1,991
1,671
4,458
Investment income
4,630
36,423
9,520
42,057
Including: Income from investment in associates and joint ventures
5,903
1,716
17,036
1,724
Gains/(losses) from changes
in fair value
(1,228)
1,628
(1,112)
1,738
Credit impairment losses
(195)
(741)
(140)
(842)
Impairment losses
(110)
252
(1,036)
(11,415)
Asset disposal gains
152
479
433
583
III. Operating profit
30,333
65,575
94,298
37,686
Add: Non-operating income
500
498
1,196
1,182
Less: Non-operating expenses
670
906
1,751
1,883
IV. Profit before taxation
30,163
65,167
93,743
36,985
Less: Income tax expense
5,970
11,828
20,948
6,045
V. Net profit
24,193
53,339
72,795
30,940
Including: net gain/(loss) of acquiree before business combination under common control
-
115
74
(74)
Classification by going concern:
(i) Continuous operating net profit
24,193
53,339
72,795
30,940
(ii) Termination of net profit
-
-
-
-
Consolidated Income Statement (Continued)
Classification by ownership:
(i) Equity shareholders of the Company
20,665
46,465
59,892
23,492
(ii) Minority interests
3,528
6,874
12,903
7,448
VI. Other comprehensive income
3,355
(976)
11,463
(3,388)
Items that may not be reclassified
subsequently to profit or loss:
1
(1)
9
(31)
Changes in fair value of other equity instrument investments
1
(1)
9
(31)
Items that may be reclassified subsequently to profit or loss:
3,354
(975)
11,454
(3,357)
Other comprehensive income that can be converted into profit or loss under the equity method
87
(485)
208
(2,266)
Cost of hedging reserve
(20)
-
(60)
-
Cash flow hedges
3,066
2,000
11,706
340
Foreign currency translation differences
221
(2,490)
(400)
(1,431)
VII. Total comprehensive income
27,548
52,363
84,258
27,552
Equity shareholders of the Company
24,094
45,912
71,305
20,726
Minority interests
3,454
6,451
12,953
6,826
VIII. Earnings per share
(i) Basic earnings per share (RMB/Share)
0.171
0.384
0.495
0.194
(ii) Diluted earnings per share (RMB/Share)
0.171
0.384
0.495
0.194
Ma Yongsheng Shou Donghua
Director, President Chief Financial Officer
Income Statement
For the nine-month period ended 30 September 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
The third quarter of 2021 (July-September)
The third quarter of 2020 (July-September)
Nine-month period
ended 30 September 2021
Nine-month period
ended 30 September 2020
I. Operating income
265,651
199,451
734,773
558,026
Less: Operating costs
203,170
142,631
566,597
430,434
Taxes and surcharges
39,146
40,363
111,871
110,502
Selling and distribution expenses
884
794
2,750
2,269
General and administrative expenses
9,353
6,675
25,739
21,681
Research and development costs
2,637
2,918
7,599
6,968
Financial expenses
2,845
2,167
8,227
6,701
Including: Interest expenses
2,228
1,982
6,421
6,011
Interest income
662
173
1,822
673
Exploration expenses, including dry holes
2,847
1,466
7,029
5,176
Add: Other income
201
1,264
944
3,158
Investment income
12,337
30,272
22,939
36,871
Including:Income from investment in associates and joint ventures
1,979
842
6,345
1,386
Gains/(losses) from changes in fair value
(243)
(2)
(11)
358
Credit impairment losses
6
21
8
51
Impairment losses
1
101
(752)
(7,993)
Asset disposal gains
9
16
6
29
II. Operating profit
17,080
34,109
28,095
6,769
Add: Non-operating income
(7)
100
196
203
Less: Non-operating expenses
289
336
808
780
III. Profit before taxation
16,784
33,873
27,483
6,192
Less: Income tax expense
1,381
4,449
4,194
(3,675)
IV. Net profit
15,403
29,424
23,289
9,867
(i) Continuous operating net profit
15,403
29,424
23,289
9,867
(ii) Termination of net profit
-
-
-
-
V. Other comprehensive income
4,444
51
10,398
(2,634)
Items that may be reclassified subsequently to profit or loss
4,444
51
10,398
(2,634)
Other comprehensive loss that can be converted into profit or loss under the equity method
90
(210)
108
(304)
Cash flow hedges
4,354
261
10,290
(2,330)
VI. Total comprehensive income
19,847
29,475
33,687
7,233
Ma Yongsheng Shou Donghua
Director, President Chief Financial Officer
Consolidated Cash Flow Statement
For the nine-month period ended 30 September 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Nine-month period
ended 30 September 2021
Nine-month period
ended 30 September 2020
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services
2,113,844
1,706,038
Refund of taxes and levies
934
2,733
Other cash received relating to operating activities
109,212
156,647
Sub-total of cash inflows
2,223,990
1,865,418
Cash paid for goods and services
(1,653,394)
(1,311,745)
Cash paid to and for employees
(56,273)
(51,786)
Payments of taxes and levies
(276,182)
(236,478)
Other cash paid relating to operating
activities
(122,418)
(181,179)
Sub-total of cash outflows
(2,108,267)
(1,781,188)
Net cash flow from operating activities
115,723
84,230
II. Cash flows from investing activities:
Cash received from disposal of investments
6,614
7,962
Cash received from returns on investments
6,461
6,746
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
919
1,899
Net cash received from disposal of subsidiaries and other business entities
4,764
48
Other cash received relating to investing
activities
26,431
41,758
Sub-total of cash inflows
45,189
58,413
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
(88,362)
(81,208)
Cash paid for acquisition of investments
(18,595)
(7,407)
Cash paid for acquisition of subsidiaries and other business units
(1,114)
(26)
Other cash paid relating to investing activities
(36,949)
(73,344)
Sub-total of cash outflows
(145,020)
(161,985)
Net cash flow used in investing activities
(99,831)
(103,572)
III. Cash flows from financing activities:
Cash received from capital contributions
604
3,395
Including: Cash received from minority shareholders' capital contributions to subsidiaries
604
3,395
Consolidated Cash Flow Statement (Continued)
Cash received from borrowings
298,393
492,002
Other cash received relating to financing activities
115
812
Sub-total of cash inflows
299,112
496,209
Cash repayments of borrowings
(252,759)
(407,406)
Cash paid for dividends, profits distribution or interest
(44,039)
(31,079)
Including: Subsidiaries' cash payments for distribution of dividends or profits to minority shareholders
(5,741)
(3,482)
Other cash paid relating to financing activities
(14,762)
(11,080)
Sub-total of cash outflows
(311,560)
(449,565)
Net cash flow (used in)/from financing activities
(12,448)
46,644
IV. Effects of changes in foreign exchange rate
(177)
(458)
V. Net increase in cash and cash equivalents
3,267
26,844
Add: Initial balance of cash and cash equivalents
87,559
60,438
VI. Ending balance of cash and cash equivalents
90,826
87,282
Ma Yongsheng Shou Donghua
Director, President Chief Financial Officer
Cash Flow Statement
For the nine-month period ended 30 September 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Nine-month period
ended 30 September 2021
Nine-month period
ended 30 September 2020
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services
805,374
628,381
Refund of taxes and levies
602
2,428
Other cash received relating to operating activities
8,306
3,458
Sub-total of cash inflows
814,282
634,267
Cash paid for goods and services
(582,164)
(408,733)
Cash paid to and for employees
(29,678)
(26,693)
Payments of taxes and levies
(154,927)
(138,726)
Other cash paid relating to operating activities
(14,208)
(11,772)
Sub-total of cash outflows
(780,977)
(585,924)
Net cash flow from operating activities
33,305
48,343
II. Cash flows from investing activities:
Cash received from disposal of investments
16,642
12,587
Cash received from returns on investments
17,791
14,860
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
56
6,558
Other cash received relating to investing activities
93,230
99,053
Sub-total of cash inflows
127,719
133,058
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
(38,050)
(35,223)
Cash paid for acquisition of investments
(37,610)
(15,484)
Cash paid for acquisition of subsidiaries and other business units
(964)
-
Other cash paid relating to investing activities
(93,843)
(118,376)
Sub-total of cash outflows
(170,467)
(169,083)
Net cash flow used in investing activities
(42,748)
(36,025)
III. Cash flows from financing activities:
Cash received from borrowings
151,145
194,538
Other cash received relating to financing activities
220,822
164,714
Sub-total of cash inflows
371,967
359,252
Cash repayments of borrowings
(121,860)
(140,761)
Cash paid for dividends or interest
(41,086)
(26,661)
Other cash paid relating to financing activities
(206,415)
(186,971)
Sub-total of cash outflows
(369,361)
(354,393)
Net cash flow from financing activities
2,606
4,859
Cash Flow Statement (Continued)
IV. Net (decrease)/increase in cash and cash equivalents
(6,837)
17,175
Add:Initial balance of cash and cash equivalents
28,082
38,616
V. Ending balance of cash and cash equivalents
21,245
55,791
Ma Yongsheng Shou Donghua
Director, President Chief Financial Officer
Segment Reporting
For the nine-month period ended 30 September 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Nine-month period
ended 30 September 2021
Nine-month period
ended 30 September 2020
Income from principal operations
Exploration and production
External sales
104,139
71,021
Inter-segment sales
61,683
44,839
Subtotal
165,822
115,860
Refining
External sales
122,468
80,475
Inter-segment sales
862,628
603,990
Subtotal
985,096
684,465
Marketing and distribution
External sales
977,324
788,682
Inter-segment sales
4,745
3,666
Subtotal
982,069
792,348
Chemicals
External sales
307,583
232,041
Inter-segment sales
48,924
39,440
Subtotal
356,507
271,481
Corporate and others
External sales
446,160
350,319
Inter-segment sales
527,164
333,470
Subtotal
973,324
683,789
Elimination of inter-segment sales
(1,505,144)
(1,037,092)
Consolidated income from principal operations
1,957,674
1,510,851
Income from other operations
Exploration and production
5,011
4,494
Refining
3,729
3,224
Marketing and distribution
27,216
26,052
Chemicals
8,164
6,402
Corporate and others
1,556
1,513
Consolidated income from other operations
45,676
41,685
Consolidated operating income
2,003,350
1,552,536
Segment Reporting (Continued)
Operating profit/(loss)
By segment
Exploration and production
7,673
(9,726)
Refining
53,284
(15,866)
Marketing and distribution
22,416
14,634
Chemicals
14,894
6,491
Corporate and others
4,609
(4,378)
Elimination
(11,835)
5,116
Total segment operating profit/(loss)
91,041
(3,729)
Investment income
Exploration and production
2,698
14,413
Refining
785
13,251
Marketing and distribution
1,626
11,268
Chemicals
7,500
(28)
Corporate and others
(3,089)
3,153
Total segment investment income
9,520
42,057
Financial expenses
(7,255)
(7,421)
Gains/(losses) from changes in fair value
(1,112)
1,738
Asset disposal gains
433
583
Other income
1,671
4,458
Operating profit
94,298
37,686
Add: Non-operating income
1,196
1,182
Less: Non-operating expenses
1,751
1,883
Profit before taxation
93,743
36,985
4.2 Quarterly financial statements prepared under International Financial Reporting Standards (IFRS)
Consolidated Income Statement
For the nine-month period ended 30 September 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Current Amount
(July-September)
Amount of the previous period
(July-September)
Nine-month period
ended 30 September 2021
Nine-month period
ended 30 September 2020
Revenue
Revenue from primary business
725,543
503,988
1,957,674
1,510,851
Other operating revenues
16,095
15,432
45,676
41,685
741,638
519,420
2,003,350
1,552,536
Operating expenses
Purchased crude oil, products and
operating supplies and expenses
(577,122)
(363,072)
(1,524,194)
(1,198,000)
Selling, general and administrative expenses
(13,338)
(14,455)
(39,147)
(38,850)
Depreciation, depletion and amortisation
(28,191)
(26,276)
(82,495)
(77,764)
Exploration expenses, including dry holes
(3,167)
(1,644)
(8,013)
(6,109)
Personnel expenses
(24,808)
(22,481)
(69,892)
(61,003)
Taxes other than income tax
(65,937)
(64,505)
(186,806)
(173,218)
Impairment losses on trade and other receivables
(195)
(741)
(140)
(842)
Other operating (expense)/income, net
(2,287)
428
(7,857)
8,303
Total operating expenses
(715,045)
(492,746)
(1,918,544)
(1,547,483)
Operating profit
26,593
26,674
84,806
5,053
Finance costs
Interest expense
(3,898)
(3,836)
(11,557)
(11,921)
Interest income
1,459
1,357
4,121
3,624
Foreign currency exchange gain, net
86
323
181
876
Net finance costs
(2,353)
(2,156)
(7,255)
(7,421)
Investment income
79
38,721
193
38,790
Share of profits less losses from associates and joint ventures
5,903
1,716
17,036
1,724
Profit before taxation
30,222
64,955
94,780
38,146
Income tax expense
(5,970)
(11,828)
(20,948)
(6,045)
Profit for the period
24,252
53,127
73,832
32,101
Attributable to:
Shareholders of the Company
20,727
46,274
60,755
24,445
Non-controlling interests
3,525
6,853
13,077
7,656
Profit for the period
24,252
53,127
73,832
32,101
Earnings per share:
Basic earnings per share (RMB)
0.171
0.382
0.502
0.202
Diluted earnings per share (RMB)
0.171
0.382
0.502
0.202
Consolidated Statement of Comprehensive Income
For the nine-month period ended 30 September 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Current Amount
(July-September)
Amount of the previous period
(July-September)
Nine-month period
ended 30 September 2021
Nine-month period
ended 30 September 2020
Profit for the period
24,252
53,127
73,832
32,101
Other comprehensive income:
3,355
(976)
11,463
(3,388)
Items that may not be reclassified subsequently to profit or loss:
Equity investments at fair value through other comprehensive income
1
(1)
9
(31)
Items that may be reclassified subsequently to profit or loss:
Share of other comprehensive income of associates and joint ventures
87
(485)
208
(2,266)
Cash flow hedges
3,066
2,000
11,706
340
Cost of hedging reserve
(20)
-
(60)
-
Foreign currency translation differences
221
(2,490)
(400)
(1,431)
Total comprehensive income for the period
27,607
52,151
85,295
28,713
Attributable to:
Shareholders of the Company
24,153
45,721
72,165
21,679
Non-controlling interests
3,454
6,430
13,130
7,034
Consolidated Balance Sheet
For the nine-month period ended 30 September 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
At 30 September 2021
At 31 December 2020
Non-current assets:
Property, plant and equipment, net
580,430
589,693
Construction in progress
143,454
124,864
Right-of-use assets
267,068
266,368
Goodwill
8,610
8,620
Interest in associates
143,940
136,163
Interest in joint ventures
59,851
52,179
Financial assets at fair value through other
comprehensive income1,665
1,525
Deferred tax assets
27,045
25,054
Long-term prepayments and other non-current assets
70,557
74,535
Total non-current assets
1,302,620
1,279,001
Current assets:
Cash and cash equivalents
90,826
87,559
Time deposits with financial institutions
113,129
100,498
Financial assets at fair value through profit and loss
3,492
1
Derivatives financial assets
32,464
12,528
Trade accounts receivable
73,568
35,584
Financial assets at fair value through other
comprehensive income10,281
8,735
Inventories
198,109
151,951
Prepaid expenses and other current assets
62,793
58,588
Total current assets
584,662
455,444
Current liabilities:
Short-term debts
64,160
23,769
Loans from Sinopec Group Company and fellow
subsidiaries4,452
5,264
Lease liabilities
15,631
15,292
Derivatives financial liabilities
8,949
4,826
Trade accounts payable and bills payable
231,406
161,723
Contract liabilities
137,168
126,193
Other payables
168,776
178,750
Income tax payable
7,300
6,586
Total current liabilities
637,842
522,403
Consolidated Balance Sheet (Continued)
Net current liabilities
53,180
66,959
Total assets less current liabilities
1,249,440
1,212,042
Non-current liabilities:
Long-term debts
76,505
72,037
Loans from Sinopec Group Company and fellow subsidiaries
12,962
11,778
Lease liabilities
171,986
172,306
Deferred tax liabilities
10,945
8,124
Provisions
46,570
45,552
Other non-current liabilities
20,437
18,965
Total non-current liabilities
339,405
328,762
Total net assets
910,035
883,280
Equity:
Share capital
121,071
121,071
Reserves
647,341
620,845
Total equity attributable to shareholders of the Company
768,412
741,916
Non-controlling interests
141,623
141,364
Total equity
910,035
883,280
Consolidated Cash Flow Statement
For the nine-month period ended 30 September 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Nine-month period ended 30 September 2021
Nine-month period ended 30 September 2020
Net cash generated from operating activities(a)
115,723
84,230
Investing activities
Capital expenditure
(77,945)
(73,011)
Exploratory wells expenditure
(10,417)
(8,197)
Purchase of investments, investments in associates and investments in joint ventures
(11,477)
(2,733)
Payment for financial assets at fair value through profit or loss
(8,232)
(4,700)
Proceeds from sale of financial assets at fair value through profit or loss
4,739
6,600
Proceeds from disposal of investments and investments in associates
6,639
1,410
Proceeds from disposal of property, plant, equipment and other non-current assets
919
1,899
Increase in time deposits with maturities over three months
(32,711)
(64,876)
Decrease in time deposits with maturities over three months
22,698
39,131
Interest received
2,407
2,627
Investment and dividend income received
6,461
6,746
Proceeds payments of other investing activities
(2,912)
(8,468)
Net cash used in investing activities
(99,831)
(103,572)
Financing activities
Proceeds from bank and other loans
298,393
492,002
Repayments of bank and other loans
(252,759)
(407,406)
Contributions to subsidiaries from non-controlling interests
604
3,395
Dividends paid by the Company
(35,111)
(23,083)
Distributions by subsidiaries to non-controlling interests
(5,741)
(3,482)
Interest paid
(3,187)
(4,514)
Payments made to acquire non-controlling interests
(1,410)
(1,117)
Repayments of lease liabilities
(12,778)
(9,514)
Proceeds from other financing activities
115
812
Payments of other financing activities
(574)
(449)
Net cash (used in) / generated from financing activities
(12,448)
46,644
Net increase in cash and cash equivalents
3,444
27,302
Cash and cash equivalents at 1 January
87,559
60,438
Effect of foreign currency exchange rate changes
(177)
(458)
Cash and cash equivalents at 30 September
90,826
87,282
Note to consolidated statement of Cash Flows
For the nine-month period ended 30 September 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
Nine-month period ended 30 September
2021
Nine-month period ended 30 September
2020
Operating activities
Profit before taxation
94,780
38,146
Adjustments for:
Depreciation, depletion and amortisation
82,495
77,764
Dry hole costs written off
5,427
4,516
Share of profits from associates and joint ventures
(17,036)
(1,724)
Investment income
(193)
(38,790)
Interest income
(4,121)
(2,360)
Interest expense
11,557
11,292
Loss/(gain) on foreign currency exchange rate changes and
derivative financial instruments1,203
(2,180)
Loss/(gain) on disposal of property, plant, equipment and
other non-current assets, net125
(82)
Impairment loss on assets
1,036
11,415
Credit impairment loss
140
842
Operating profit before change of operating capital
175,413
98,839
Accounts receivable and other current assets
(62,170)
3,735
Inventories
(46,627)
8,450
Accounts payable and other current liabilities
69,532
(16,652)
Subtotal
136,148
94,372
Income tax paid
(20,425)
(10,142)
Net cash generated from operating activities
115,723
84,230
Segment Reporting
For the nine-month period ended 30 September 2021
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
Nine-month period
ended 30 September 2021
Nine-month period
ended 30 September 2020
Revenue from primary business
Exploration and production
External sales
104,139
71,021
Inter-segment sales
61,683
44,839
Subtotal
165,822
115,860
Refining
External sales
122,468
80,475
Inter-segment sales
862,628
603,990
Subtotal
985,096
684,465
Marketing and distribution
External sales
977,324
788,682
Inter-segment sales
4,745
3,666
Subtotal
982,069
792,348
Chemicals
External sales
307,583
232,041
Inter-segment sales
48,924
39,440
Subtotal
356,507
271,481
Corporate and others
External sales
446,160
350,319
Inter-segment sales
527,164
333,470
Subtotal
973,324
683,789
Elimination of inter-segment sales
(1,505,144)
(1,037,092)
Revenue from primary business
1,957,674
1,510,851
Other operating revenues
Exploration and production
5,011
4,494
Refining
3,729
3,224
Marketing and distribution
27,216
26,052
Chemicals
8,164
6,402
Corporate and others
1,556
1,513
Other operating revenues
45,676
41,685
Revenue
2,003,350
1,552,536
Result
Operating profit/(loss)
Segment Reporting (Continued)
By segment
Exploration and production
8,708
(6,479)
Refining
53,541
(15,080)
Marketing and distribution
21,628
16,958
Chemicals
15,564
7,054
Corporate and others
(2,800)
(2,516)
Elimination
(11,835)
5,116
Total segment operating profit
84,806
5,053
Share of profits from associates and joint ventures
Exploration and production
2,134
1,208
Refining
728
(2,177)
Marketing and distribution
2,678
1,171
Chemicals
7,556
(40)
Corporate and others
3,940
1,562
Aggregate share of profits from associates and joint ventures
17,036
1,724
Investment income
Exploration and production
62
13,205
Refining
(1)
15,389
Marketing and distribution
10
9,092
Chemicals
(56)
10
Corporate and others
178
1,094
Aggregate investment income
193
38,790
Net finance costs
(7,255)
(7,421)
Profit before taxation
94,780
38,146
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
Nine-month period
ended 30 September 2021
Nine-month period
ended 30 September 2020
Net profit under CASs
72,795
30,940
Adjustments:
Government grants(i)
37
40
Safety production fund(ii)
1,000
1,126
Other
-
(5)
Profit for the period under IFRS
73,832
32,101
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 30 September 2021
As of 31 December 2020
Shareholders' equity under CASs
911,016
884,298
Adjustments:
Government grants(i)
(981)
(1,018)
Total equity under IFRS
910,035
883,280
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