Achieving Robust Growth in Operating Results as Market Environment Continues to Improve
HONG KONG, Aug. 22, 2018 /PRNewswire/ -- SINOPEC Engineering (Group) Co., Ltd. ("SEG" or the "Company", together with its subsidiaries collectively known as the "Group") (stock code: 2386) today announces its interim results for the six months ended 30 June 2017 (the "Reporting Period").
In the first half of 2018, the Group has obtained better operation performance by making energetic efforts to develop domestic and foreign markets, strengthening its management and control of projects and improving the level of elaborate management. During the Reporting Period, the Group recognized a revenue of RMB18.336 billion, representing an increase of 33.2% on a period-on-period basis. The Group's profits attributable to equity holders was RMB1.108 billion, representing an increase of 32.7% on a period-on-period basis. The ongoing projects of the Group have been implemented steadily, and the safety, quality and progress of such projects have been under full control. The Board decided to distribute an interim dividend of RMB0.100 per share, with a dividend payout ratio of 40%.
Significant Increase in newly signed contracts due to energetic efforts to develop domestic and foreign markets: During the Reporting Period, the petroleum and chemical industry in China continues to make a favorable turn while maintaining stabilization, bringing acceleration of oil refining and chemical engineering industry investment. The total value of new contracts entered into by the Group was RMB35.484 billion, representing an increase of 99.7% on a period-on-period basis. Benefiting from the commencement of Sinopec Group to build "four world-class refining bases", new contracts were signed including Zhongke Guangdong oil refining and chemical integrated complex project and Sinopec-SABIC Petrochemical polycarbonate project. The value of newly signed domestic contracts amounted to RMB32.241 billion, representing an increase of 95.6% on a period-on-period basis. Seizing the "Belt and Road" construction opportunities, the value of newly signed overseas contracts amounted to approximately USD483 million, representing a 152.8% increase.
Strengthening management and control of projects and improving the level of elaborate management: During the Reporting Period, to ensure projects were implemented steadily, safely and at a higher efficiency, the Group optimized allocation of resources as well as strengthened its design, subcontracting and accounting management. The Group continued to enhance its risk management and safeguarded the smooth implementation of projects domestically and overseas. Safety, quality and progress of projects are fully under control. The Group has established "double early warning" mechanism, promoting project implementation progress and income confirmation progress, and ensured realization of efficiency target. As at the end of the Reporting Period, the Group's backlog was RMB108.176 billion, representing an increase of 18.8% from that as at 31 December 2017, and 2.99 times of the total revenue of RMB36.209 billion in 2017.
Continuing to achieve fruitful results in technology innovation: During the Reporting Period, the Group was awarded with 65 prizes for scientific and technological advancement above provincial/ministerial levels, including two projects of "coal-based oil/olefin large-scale modern coal chemical industry complete technology development and application" and "high efficiency methanol to olefins whole process technology" that the Group has participated in research and development and taken the lead in design were awarded the first prize of national science and technology progress in 2017; "deep delayed coking technology to improve the yield of light oil" won second prize of national science and technology progress in 2017. 19 projects obtained the 2017 Sinopec Group Science and Technology Progress Award. 6 projects won the annual Outstanding Engineering Design Award of Sinopec Group, 21 projects won the award of quality engineering.
Chairman of SEG, Mr. LING Yiqun said, "In the first half of 2018, the international oil price fluctuated and the industrial efficiency of the petroleum and chemical industry of China has been further improved. Multiple projects among "seven major petrochemical industrial bases" have continuously entered construction peak. C2/C3 conversion utilization has become a new market hot point, multiple projects of ethane cracking for production of ethylene have started initial planning or design, and oil price rise has enhanced the investment intention of owners of new coal chemical industry project. The Company has made energetic efforts to develop domestic and foreign markets, continued to enhance project assurance capability, optimized business structure and internal resources, and achieved stable and solid growth. In the second half of 2018, the Group will keep working on the overall solutions involving natural gas, new coal chemicals, environmental protection, energy saving and relevant industries on the basis of consolidating its conventionally advantaged businesses such as oil refining and petrochemical industries for the purpose of creating innovation system focusing on technology innovation by further deepening the reorganization of specialized engineering, regulating internal transactions and optimizing allocation of resources. The Group will consolidate the existing overseas markets, deploy the favorable policies associated with the "Belt and Road" construction, actively expand the markets in the countries along the "Belt and Road" and keep improving the Group's overall profitability and risk resistance ability in relation to overseas businesses.
Business Review and Highlights
Fruitful market development
During the Reporting Period, the Group seized market recovery opportunity, exploited its overall advantages in its industry, business and technical chains, and increased market development efforts. During the Reporting Period, the value of new contracts entered into by the Group was RMB35.484 billion, among which, the value of newly signed domestic contracts amounted to RMB32.241 billion, and the value of newly signed overseas contracts amounted to approximately USD483 million.
In the PRC, during the Reporting Period, the Group entered into new contracts for a number of large projects, such as Zhongke Integrated Project (oil refining, chemical industry and power station parts) with a total contract value of approximately RMB19.644 billion; Sinopec Sabic Project with a total contract value of approximately RMB4.586 billion; Sinopec Group Yanshan Branch continuous reforming combination unit oil product upgrading and revamping project with a total contract value of approximately RMB640 million. Overseas, during the Reporting Period, the Group entered into new contracts for a number of large projects, such as Saudi SABIC GAS Phase-9 Air Separation Project with a total contract value of approximately RMB1.756 billion; Kuwait New Collection Center (GC-32) Project with a total contract value of approximately RMB867 million, etc. In addition to the above projects, the Group has also kept track of some oil refining, petrochemical engineering, new coal chemical, energy saving and environmental protection projects, which are expected to be signed in the future.
Successful Implementation of Major Projects
Wide cooperation, pursue win-win
In the Reporting Period, the Group has continued to carry out wide cooperation with research and development institutions and universities in China and foreign countries in fields such as new coal chemical, energy saving and environmental protection and new energy, in which the new generation of coal (synthetic gas) to glycol technology pilot plant carried out in cooperation with Chinese Academy of Sciences has been completed and full flow procedure has been initiated; has propelled demonstration of direct coal liquefaction technology in a company in Xinjiang; has signed agreement for implementation of industrial unit design on the basis of construction of demonstration unit for biomass raw material-to-gasoline/diesel technology developed by Henan Shenrun Group; in response to national policy for promotion of ethanol gasoline, has collaborated and carried out research of cellulose ethanol industrial pilot plant program research, and has communicated with potential investor; has cooperated with China University of Petroleum (Beijing) to participate in development of "beautiful countryside" in Beijing and provide initial engineering service.
Continuous promotion of innovation and technological advancement
Steady progress of the R&D of major technologies developed along with the key projects.
A batch of key development technologies have been completed, and have reached the development target: All 5 projects such as large size liquefied natural gas (LNG) receiving station engineering complete set technology, development of complete set technology of producing 100 Ktpa propyleneoxide by hydrogen peroxide solution, coal chemical sewage comprehensive treatment and near-zero emission technology development have been brought into industrial application; and key technical problem tackling projects such as new type sulfuric acid alkylation technology development and industrial application, the 2nd efficient environmental protection arene technology development and industrial application of Sinopec, 20 Ktpa slurry bed stredford process hydrogen peroxide production complete set technology and SE coal (coke) water slurry gasification complete set technology development have entered onsite construction phase.
Research and development work of a batch of key projects have been progressed stably: Key technical problem tackling targets of different phases have been completed for projects such as 20 ktpa ZCA-1 solid acid alkylation complete set new technology development and industrial application, gas phase polypropylene product VOC deprivation technique complete set technology development, heavy feed stock for increasing production of low-carbon alkene and BTX key technology, solid super acid C5/C6 isomerization technology development and industrial test, 2,000t level SE coal gasification large-scale industrial demonstration and application, etc..
Technology licensing was conducted effectively. During the Reporting Period, the value of newly signed technology licensing contract amounted to RMB180.00 million.
Good momentum persisted in patent applications. During the Reporting Period, the Group completed 256 new patent applications, including 166 invention patents, accounting for 64.8%; licensing of 202 patents, of which 62 invention patents, accounting for 30.7%.
Continuing to Achieve Numerous Fruitful Results in Technology Innovation. During the Reporting Period, the Group was awarded with 65 prizes for scientific and technological advancement above provincial/ministerial levels, including two projects of "coal-based oil/olefin large-scale modern coal chemical industry complete technology development and application" and "high efficiency methanol to olefins whole process technology" that the Group has participated in research and development and taken the lead in design were awarded the first prize of national science and technology progress in 2017; "deep delayed coking technology to improve the yield of light oil" won second prize of national science and technology progress in 2017. 19 projects obtained the 2017 Sinopec Group Science and Technology Progress Award. 6 projects won the annual Outstanding Engineering Design Award of Sinopec Group, 21 projects won the award of quality engineering.
Environmental protection and energy saving business was promoted constantly
During the Reporting Period, the Group signed energy saving and environmental protection contracts with a value of RMB726 million, including joint sewage treatment plant and alkali waste incinerator EPC general contract of Sinopec Group and Anhui Province, boiler and combustion engine flue gas denitration reconstruction project of Fujian Refining & Petrochemical Company Limited and boiler flue gas denitration reconstruction project of Yangzi Petrochemical Company, etc..
In the field of energy saving, the Group has actively propelled the progress of 56 existing contract energy management projects of Sinopec Group and signed contract for 4 projects, and is performing contract negotiation for 11 projects, and the Group promoted progress of several contract energy management projects in Anqing, etc. The Group is actively organizing and implementing energy saving technology communication to enrich energy saving technology resources.
In the field of environmental protection, the Group has won the bid for EPC project for site pollution restoration, abatement and control project of Dongli plant of Polyether Department of Sinopec Tianjin Petrochemical, and is implementing contract negotiation at present; and has actively propelled the progress of a large size polluted soil abatement and control project of China. In collaboration with advanced technologies of China and foreign countries, has implemented CO2 trap, conversion demonstration device program research and initial stage work of project.
Continuous promotion of digital factory construction
During the Reporting Period, the Group has comprehensively propelled integration design and digital delivery application and basically completed digital factory construction platform based on INTERGRAPH/AVEVA production line, innovation of engineering design mode of the Group has supported intelligent factory operation of owners of China and foreign countries. The Group has strengthened full range, full module, full process and full elements cost collectivized management and control of large scale engineering software, in-depth application of intelligent technique design, comprehensive promotion of integration engineering design, quality and efficiency enhancement of visualized 3D design, breakthrough in digital delivery pilot, concentrated management and control of standardized engineering master data, cloud resources sharing of virtual engineering, first-class platform, outstanding design and high quality service have effectively ensured high level, high quality and high efficiency completion of master contract of different owners of China and foreign countries, meanwhile, have enhanced enterprise engineering design capability and project implementation capability in an overall manner, and have injected new energy into creation of intelligent engineering company.
Safe production remained stable
During the Reporting Period, regarding QHSE (quality, health, safety and environment) management, with long-term mechanism construction as the leader, and tamping "three-base management" and strengthening risk prevention and control as the main line, adhere to people-oriented, pay attention to continuous improvement, focus on QHSE system management and quality safety main responsibility implementation, push forward quality and safety standardization construction and essential security capacity building, pass multi-level training and deepen the design of the essence of safety management, strengthen supervision and inspection, carry out in-depth implementation of quality promotion activities and other measures, and constantly strengthen QHSE control, lay a more solid foundation for management, and control overall situation of quality, safety and external public security.
As at the end of the Reporting Period, achieved the goal of no reporting accidents in safety, quality, environment, occupational health and overseas public security accident had happened in the project under execution as a result of the awareness and strict management of all employees of the Group, and 108.3 million safe man hours had been realized in accumulation.
Business Prospects
Looking forward to the second half of 2018, the uncertainty of the global economy increases, the uncertainty of international oil price trend increases, and the influence of trade friction requires further observation. Domestic oil refining industry will accelerate industrial park arrangement and product structure adjustment, the current international oil price will enable integrated energy company to realize full industrial chain benefit creation, the domestic natural gas demand is strong and is facing a tremendous development opportunity, the Group will correctly face the situations, sufficiently grasp opportunities, actively exert the advantages of collectivization, integration and large scale, continuously enhance core competition force of enterprise, propel sustainable and healthy development of enterprise, and make effort to create a "national business card" of oil refining and chemical engineering of China.
Regarding market development, the Group will exert one-stop overall solution advantages, strengthen overall development of large size energy chemical engineering project, solidify and enhance share of traditional engineering market, so as to ensure realization of the whole-year task target; accelerate promotion of market development in new field, take energy saving and environmental protection as breakthrough point, accelerate promotion of contract energy management and land restoration business as benefit growth point, grasp market opportunities to drive development of engineering markets such as natural gas utilization, biomass new energy and CO2 trap utilization, etc. Taking realization of sustainable development as target, actively integrate external advantageous resources, establish strategic cooperation partnership relation with leading enterprises in relevant industries such as electricity, shipping and capital construction, innovate cooperation mode, and enhance the competition force of entire factory EPC Contracting; exert overall advantages, propel development of strategic customers, focus on enhancement of customer value, make effort to cultivate strategic customer relation featuring long-term stability and recognition of high price for high quality.
Regarding project management, the Group will continue to focus on effectiveness, propel effectiveness-oriented project management mode, and give prominence to the principle of effectiveness first in large project coordination and resources configuration management under the precondition of assurance of safety, quality and progress. In terms of overseas project management, regarding the complicated international situations at present, strengthen research of overseas project risk, and formulate effective and feasible program, so as to ensure the Company benefit to the maximum degree. Pay attention to establishment of foundation of overseas project implementation management, sufficiently exert integration advantages, gradually realize resources sharing, and enhance the overall capability of company project implementation.
Regarding technology R&D, the Group will focus on overall development strategy, liberate the mind, actively implement technology source survey, especially actively look for technical cooperation in innovative looking and cutting edge technologies and certain common technologies, and expand technology sources. Regarding projects of which technical basis is good, conditions are goods and industrialization prospect is clear, it is necessary to further strengthen support, so as to speed out obtainment of achievement and benefit.
In terms of resources optimization, the Group will exert the existing mature resources advantages of subsidiary companies, utilize the Group integration management mechanism, enhance subsidiary companies resources configuration efficiency, and realize resources optimization configuration. In accordance with the principle of resources optimization and mutual compensation of advantages, strengthening of business cooperation as well as establishment and execution of mutual compensation mechanism of work, accelerate promotion of progress and depth of resources optimization integration work in regions where conditions are available, enhance regional resources configuration efficiency, enhance regional comprehensive competition force, enhance overall composition of forces, reduce marginal cost and enhance overall efficiency.
Summary of Financial Data and Indicators Prepared in Accordance with International Financial Reporting Standards ("IFRS")
| Unit: RMB'000 |
|||
| Items |
As at 30 June |
As at 31 |
Changes from |
| Total assets |
61,155,035 |
59,405,621 |
2.9 |
| Total equity attributable to equity holders |
25,936,402 |
25,586,839 |
1.4 |
| Net assets per share attributable to |
5.86 |
5.78 |
1.4 |
| Unit: RMB'000 |
|||
| Items |
For the six months ended 30 June |
Changes over t |
|
| 2018 |
2017 |
||
| Revenue |
18,335,880 |
13,764,426 |
33.2 |
| Gross profit |
1,921,486 |
2,213,384 |
(13.2) |
| Operating profit |
997,847 |
843,605 |
18.3 |
| Profit before taxation |
1,335,904 |
1,063,567 |
25.6 |
| Net profit attributable to equity holders of |
1,107,565 |
834,875 |
32.7 |
| Basic earnings per share (RMB) |
0.25 |
0.19 |
32.7 |
| Net cash flow (used in)/generated from |
(1,032,823) |
(736,076) |
40.3 |
| Net cash flow (used in)/generated from |
(0.23) |
(0.17) |
40.3 |
| Items |
For the six months ended 30 June |
|
| 2018 |
2017 |
|
| Gross profit margin (%) |
10.5 |
16.1 |
| Net profit margin (%) |
6.0 |
6.1 |
| Return on assets (%) |
1.8 |
1.4 |
| Return on equity (%) |
4.3 |
3.2 |
| Return on invested capital (%) |
4.3 |
3.3 |
| Items |
As at 30 June 2018 |
As at 31 December |
| Asset-liability ratio (%) |
57.6 |
56.9 |
~ End ~
This press release is issued by PRChina Limited on behalf of SINOPEC Engineering (Group) Co., Ltd.
About SINOPEC Engineering (Group) Co., Ltd.
SINOPEC Engineering (Group) Co., Ltd. is an international engineering corporation, with the leading edge in the PRC. The Group provides engineering services for a broad range of industries including oil refining, petrochemicals, new coal chemicals, inorganic chemicals, pharmaceutical chemicals, clean energy, storage and transportation engineering, environmental protection and energy saving engineering, with a complete service chain involving research, development and licensing, preliminary consultation, financing assistance, design, procurement, construction, large equipment lifting and transportation, and pre-commissioning/start-up services. With its industry experience of more than 60 years and continual innovation in technical expertise, the Group has achieved great success in the design and construction of large-scale and complex oil refining, petrochemical, new coal chemical, natural gas processing and storage and transportation engineering projects, and possesses strong competitiveness.
Disclaimer
This press release includes "forward-looking statements". All statements, other than statements of historical facts that address activities, events or developments that the Group expects or anticipates will or may occur in the future (including but not limited to projections, targets, other estimates and business plans) are forward-looking statements. The Group'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, 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 the Group's control. In addition, the Group makes the forward-looking statements referred to herein as of today and undertakes no obligation to update these statements.
Investor and Media Enquiries:
SINOPEC Engineering (Group) Co., Ltd. - Office of the Board
Shan Kai / Liu Jingjing / Yang Yue
Tel: (86) 10 6499 8019 / (86) 10 6499 8020 / (86) 10 6499 8017
Fax: (86) 10 6499 8193
Email: seg.ir@sinopec.com
PRChina Limited
David Shiu / Charles Chan / Doris Au-Yeung
Tel: (852) 2522 1838 / (852) 2522 1368
Fax: (852) 2521 9955
Email: dshiu@prchina.com.hk / ckchan@prchina.com.hk / dauyeung@prchina.com.hk
