2013 First Quarter Results of Sinopec Corp. Recorded Remarkable Growth Year-on-Year

BEIJING, April 26, 2013 /PRNewswire/ -- China Petroleum & Chemical Corporation ("Sinopec Corp." or "the Company") (CH: 600028; HKEX: 386; NYSE: SNP; LSE: SNP) today announced its unaudited first quarter results for the three months ended 31 March 2013.

Financial Highlights:

• In accordance with the China Accounting Standards for Business Enterprises ("ASBE"), in Q1 2013, the Company's operating income was RMB 695.571 billion, up 3.61% over the same period of last year, and operating profit was RMB 23.103 billion, up 24.04% over the same period of last year. Net profit attributable to equity shareholders of the Company was RMB 15.834 billion, up 23.42% over the same period of last year. Basic and diluted earnings per share were RMB 0.179 and RMB 0.178 respectively, up 20.95% and 21.09% over the same period of last year.
• In accordance with the International Financial Reporting Standards ("IFRS"), in Q1 2013, the Company's turnover and other income was RMB 695.571 billion, up 3.61% over the same period of last year. Operating profit was RMB 27.569 billion, up 26.41% over the same period of last year. Profit attributable to equity shareholders of the Company was RMB 16.677 billion, up 24.40% over the same period of last year. Basic and diluted earnings per share were RMB 0.189 and RMB 0.188 respectively, up 22.73% and 22.88% over the same period of last year.

Business Highlights:

• Exploration and Production Segment: The Company's crude oil and natural gas output increased steadily; crude oil output was 82.17 million barrels, with a growth of 0.78% over the same period of last year, natural gas output was 163.20 billion cubic feet, with a growth of 13.98% over the same period of last year. The realized price of crude oil fell by 6.85% to USD 98.83 per barrel, while the realized price of natural gas rose by 3.90% to USD 5.86 per thousand cubic feet over the same period of last year. In the first quarter, the exploration and production segment realized an operating profit of RMB 16.23 billion, with a decrease of 16.99% over the same period of last year.
• Refining Segment: The Company processed 58.6923 million tonnes of crude oil, with a growth of 5.92% over the same period of last year; oil products output was 35.2953 million tonnes, with a growth of 7.39% over the same period of last year. In the first quarter, the refining segment realized a turn-around in profitability with an operating profit of RMB 2.204 billion.
• Marketing and Distribution Segment: The Company's domestic sales volume of oil products reached 38.917 million tonnes, with a growth of 1.70% over the same period of last year, among which, the retail sales volume reached 26.641 million tonnes, with a growth of 1.74% over the same period of last year. In the first quarter, the marketing and distribution segment realized an operating profit of RMB 9.126 billion, with a decrease of 11.20% over the same period of last year.
• Chemicals Segment: Ethylene output was 2.442 million tonnes, with a decrease of 0.53% over the same period of last year; the outputs of synthetic resin, synthetic rubber and synthetic fiber were 3.3948 million tonnes, 247.5 thousand tonnes and 351.6 thousand tonnes respectively. In the first quarter, the chemical segment realized an operating profit of RMB 164 million, with a decrease of 87.47% over the same period of last year.
• Capital expenditure for the first quarter of 2013 amounted to approximately RMB 21.535 billion.

In the first quarter of 2013, the quantitative easing of major economies stimulated the slow recovery of the global economy. National economy maintained steady growth at the beginning of the year and China's GDP (gross domestic product) increased by 7.7% over the same period of last year. On 26th March, the National Development and Reform Commission circulated a new pricing mechanism for oil products, to enable domestic oil product prices to effectively reflect fluctuations of global crude oil prices. In the first quarter, the Company highlighted the benefit of using safe and stable operations and market orientation as the base for development. The Company has been motivated by the strengthening of management and the progress in science and technology innovation. This has enabled the Company to open up the market, optimize production and operations, hence operational performance increased significantly over the same period of last year.

BUSINESS REVIEW

Exploration and Production

The Company strengthened its oilfield exploration and development, which resulted in an increase in the production of crude oil and natural gas. In the area of petroleum exploration, progress was made in the old oil areas in East China (such as Jiyang trough, etc), Tarim Basin and Ordos Basin. In the area of development, initial progress was made in certain key projects for crude oil development and production capacity construction. Initial results were achieved in the comprehensive harnessing work in old areas; key natural gas production projects in Yuanba and Western Sichuan were pushed forward. In the first quarter, the Company's crude oil and natural gas output increased steadily; crude oil output was 82.17 million barrels, with a growth of 0.78% over the same period of last year, natural gas output was 163.20 billion cubic feet, with a growth of 13.98% over the same period of last year. The realized price of crude oil fell by 6.85% to USD 98.83 per barrel, while the realized price of natural gas rose by 3.90% to USD 5.86 per thousand cubic feet over the same period of last year. In the first quarter, the exploration and production segment realized an operating profit of RMB 16.23 billion, with a decrease of 16.99% over the same period of last year.

Refining

The refineries were able to operate at high capacity resulting in the increased production of value-added products. This was due to an emphasis on cost reduction, technical innovation and good management as well as from remaining market orientated and focusing on the economic benefits. In the first quarter, the Company processed 58.6923 million tonnes of crude oil, with a growth of 5.92% over the same period of last year; oil products output was 35.2953 million tonnes, with a growth of 7.39% over the same period of last year. The refining segment made a profit instead of suffering a loss compared with the same period of last year, and realized an operating profit of RMB 2.204 billion.

Marketing and Distribution

In the face of lower growth rate of domestic market demand for oil products and the intensification of market competition, the Company brought into play its advantages of systematic management, marketing network and brand value, to innovate the commercial mode of the non-fuel business. In the first quarter, the Company's domestic sales volume of oil products reached 38.917 million tonnes, with a growth of 1.70% over the same period of last year, among which, the retail sales volume reached 26.641 million tonnes, with a growth of 1.74% over the same period of last year. In the first quarter, the marketing and distribution segment realized an operating profit of RMB 9.126 billion, with a decrease of 11.20% over the same period of last year.

Chemicals

The first quarter of 2013 experienced a difficult market environment for chemicals with high feedstock price, sluggish demand and declining product prices. The Company upheld market-oriented and benefit-centered principle, steadily pushed forward integrated business operation, maintained the safe and stable operation of chemical plants, optimized feedstock mix and product slate, accelerated the transformation of chemical business from production type to marketing type. In the first quarter, ethylene output was 2.442 million tonnes, with a decrease of 0.53% over the same period of last year; the outputs of synthetic resin, synthetic rubber and synthetic fiber were 3.3948 million tonnes, 247.5 thousand tonnes and 351.6 thousand tonnes respectively. In the first quarter, chemical segment realized an operating profit of RMB 164 million, with a decrease of 87.47% over the same period of last year.

Capital Expenditure

Capital expenditure of the Company was approximately RMB 21.535 billion in the first quarter, of which RMB 9.416 billion was spent on the exploration and production segment. RMB 2.837 billion was spent on the refining segment. Capital expenditure for the chemical business and marketing and distribution segment was RMB 2.277 billion and RMB 6.396 billion respectively. Capital expenditure for the Headquarters' scientific research facilities and IT projects was RMB 609 million.

Operational Data for the First Quarter

APPENDIX

Principal financial data and indicators

About Sinopec

Sinopec is one of the largest integrated energy and chemical companies with upstream, midstream and downstream operations in China. Its principal operations include: the exploration and production, pipeline transportation and sales of petroleum and natural gas; the sales, storage and transportation of petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products; import & export, as well as import and export agency business of oil, natural gas, petroleum products, petrochemical and chemical products, and other commodities and technologies; and research, development and application of technologies and information.

Adhering to its corporate mission of "Enterprise development, Contribution to the Country, Shareholder value creation, Social responsibility and Employee wellbeing", Sinopec implements strategies of resources, markets, integration, internationalization, differentiation and green low-carbon development with a view to realize its vision of building a world first class energy and chemical company.

Disclaimer

This press release includes "forward-looking statements". All statements, other than statements of historical facts that address activities, events or developments that Sinopec Corp. expects or anticipates will or may occur in the future (including but not limited to projections, targets, reserve volume, other estimates and business plans) are forward-looking statements. Sinopec Corp.'s actual results or developments may differ materially from those indicated by these forward-looking statements as a result of various factors and uncertainties, including but not limited to the price fluctuation, possible changes in actual demand, foreign exchange rate, results of oil exploration, estimates of oil and gas reserves, market shares, competition, environmental risks, possible changes to laws, finance and regulations, conditions of the global economy and financial markets, political risks, possible delay of projects, government approval of projects, cost estimates and other factors beyond Sinopec Corp.'s control. In addition, Sinopec Corp. makes the forward-looking statements referred to herein as of today and undertakes no obligation to update these statements.