China Petroleum & Chemical Corporation Announces 2012 Third Quarter Results

BEIJING, October 28, 2012 /PRNewswire/ -- China Petroleum & Chemical Corporation ("Sinopec" or "the Company") (CH: 600028; HKEX: 386; NYSE: SNP; LSE: SNP) today announced its unaudited third quarter results for the nine months ended 30 September, 2012.

Financial Highlights:

• In accordance with the PRC Accounting Standards for Business Enterprises ("ASBE"), in the third quarter of 2012, the Company's operating income increased by 5.43% year-on-year to RMB676.694 billion. Net profit attributable to shareholders of the company decreased by 7.5% year-on-year to RMB18.249 billion and the basic earnings per share was RMB0.210, a reduction of 7.9% year-on-year. In accordance with the International Financial Reporting Standards (IFRS), in the third quarter of 2012, the Company's turnover, other operating revenues and other income amounted to RMB676.694 billion, increased by 5.43% over the same period of last year. Operating profit amounted to RMB28.185 billion in the third quarter, and net profit attributable to the shareholders of the Company amounted to RMB18.326 billion, down by 9.38% from the same period of last year. Basic earnings per share was RMB0.211, down by 9.44% year-on-year.
• In the first three quarters of 2012, the domestic demand for oil products and chemical products continued to rise, though at a slower rate. The price of chemical products fell in the second quarter, but rebounded in the third quarter. The Company made rational arrangements for production and operations in accordance with the macroeconomic trend and market demand, and actively adjusted its product mix, leading to a remarkable quarter-on-quarter improvement of results in the third quarter.

Business Highlights:

• Exploration & Production Segment - In the first three quarters, the Company's oil and gas production reached 318 million barrels of oil equivalent, representing a year-on-year growth of 4.92%, of which, crude oil production was 245 million barrels and natural gas production was 438 billion cubic feet, representing a year-on-year growth of 2.32 % and 14.69 % respectively.
• Refining Segment - In the first three quarters, the daily crude oil processing volume was 4.39 million barrels, representing a year-on-year growth of 0.46 %.
• Marketing and Distribution Segment - The total sales volume and retail sales volume of oil product amounted to 128.34 million tonnes, representing a year-on-year growth of 5.56%. Total domestic sales volume of oil products increased by 4.32% to 118.48 million tonnes, of which the retail sales volume of oil product amounted to 81.05 million tonnes, representing a year-on-year growth of 7.28%.
• Chemicals Segment - In the first three quarters, the output of ethylene was 7.024 million tonnes, representing a year-on-year decrease of 4.51%, and the output of synthetic resin was 9.956 million tonnes, representing a year-on-year decrease of 1.10%.
• In the first three quarters of 2012, the Company's capital expenditure was RMB 83.448 billion.

RESULTS REVIEW

Exploration & Production Segment

Significant progress has been made in field exploration, including south Ordos, Jiyang Depression, western Sichuan and Yuanba. The Company has strengthened and refined the development and management of old oilfields, accelerated the growth in mass production of oil and gas, promoted the exploration and development of unconventional oil and gas, and started to build the production capacity of shale gas in Fuling Pilot Project. In the first three quarters, the Company's oil and gas production reached 318 million barrels of oil equivalent, representing a year-on-year growth of 4.92%, of which, crude oil production was 245 million barrels and natural gas production was 438.4 billion cubic feet, representing a year-on-year growth of 2.32 % and 14.69 % respectively.

Refining Segment

The Company has optimized the purchase and allocation of crude oil, readjusted refining utilization, accelerated an upgrade in the quality of oil products, and adjusted the product mix to increase the output of gasoline and jet fuel. The Company has also streamlined operations to reduce cost. In the first three quarters, the daily crude oil processing volume was 4.39 million barrels, representing a year-on-year growth of 0.46 %.

Marketing and Distribution Segment:

The Company adjusted the operation strategies in response to changes in market demand. The Company maintained a good balance of oil products resources and optimized sales structure to increase retail volume; the Company developed its non-fuel business and e-commerce business; and the Company seized the opportunity to further explore the market of natural gas for transportation. In the first three quarters, the total sales volume and retail sales volume of oil product amounted to 128.34 million tonnes and 81.05 million tonnes respectively, representing a year-on-year growth of 5.56% and 7.28%.

Chemicals Segment

In light of the market situation, the Company has actively lowered the operation utilization of its chemical facilities, maintained a safe and stable operation, continuously raised the major economic and technical indicators; optimized and adjusted the structure of raw materials and chemical products. The Company has increased the output of high-value-added and differentiated products to enhance profitability. In the first three quarters, the output of ethylene was 7.024 million tonnes, representing a year-on-year decrease of 4.51%, and the output of synthetic resin was 9.956 million tonnes, representing a year-on-year decrease of 1.10%.

Capital Expenditure

In the first three quarters of 2012, the Company's capital expenditure was RMB 83.448 billion. Of this total, RMB 34.999 billion was used in the exploration and production segment, mainly for the exploration and development of the Shengli shallow water Oilfield, Tahe Oilfield in the northwest, Ordos oil and gas field and Sichuan Basin as well as Shandong LNG project. RMB 16.829 billion was used in the refining segment, mainly for a diesel quality upgrading, and refinery revamping projects in Shanghai Petrochemical and Jinling. RMB 10.496 billion was used in the chemicals segment, mainly for the construction of the Wuhan 800,000 tpa ethylene project, Yanshan butyl rubber project, and the Yizheng 1,4-Butanediol(BDO) project. RMB 20.334 billion was used in the marketing and distribution segment, mainly for the construction and acquisition of service stations, oil product pipelines and depots in the key areas such as highways, major cities and newly planned regions; promoting the non-fuel business and the IC card value-added services; 1,046 service stations were developed. RMB 0.79 billion was used for corporate and others, mainly for R&D facilities and the construction of IT projects.

Appendix

About Sinopec Corp.

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 Corp. 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.