Sinopec Achieved Good Performance in 2023 Q1 Net Profit Reached RMB 20.7 Billion

Rhea-AI Summary

China Petroleum & Chemical Corporation (Sinopec Corp.) announced its Q1 2023 unaudited results, reporting a net profit of RMB 20.740 billion, a year-on-year decrease of 11.87%. The company's operating income rose by 2.59% to RMB 791.331 billion. Oil and gas production reached 124.6 million boe, with natural gas at 330.47 billion cubic feet. The refining segment processed 62.24 million tonnes of crude oil, generating RMB 10.459 billion EBIT. The chemicals segment, however, faced challenges, realizing a RMB -3.022 billion EBIT. Despite a 5.3% increase in gas production, the realized crude oil price dropped by 15.5% to USD 75.21 per barrel.

Positive

• Operating income increased by 2.59% to RMB 791.331 billion.
• Oil and gas production rose by 2.6% to 124.6 million barrels of oil equivalent.
• Natural gas production increased by 5.3% to 330.47 billion cubic feet.
• Total sales volume of refined oil products grew by 10.1% year on year.

Negative

• Net profit attributable to shareholders decreased by 11.87% compared to previous year.
• Realized crude oil price fell by 15.5% to USD 75.21 per barrel.
• Chemicals segment reported a significant EBIT loss of RMB -3.022 billion.

BEIJING, CHINA / ACCESSWIRE / April 27, 2023 / China Petroleum & Chemical Corporation ("Sinopec Corp." or the "Company") (HKEX:00386)(SSE:600028) today announced its unaudited first quarterly results for the three months ended 31 March 2023.

Financial Highlights

• In accordance with the IFRS, the Company's operating income for the first quarter of 2023 was RMB 791.331 billion, up by 2.59% year on year; the net profit attributable to shareholders of the Company was RMB 20.740 billion; the basic earnings per share were RMB 0.173. In accordance with the CASs, the net profit attributable to equity shareholders of the Company for the first quarter was RMB 20.102 billion; the basic earnings per share were RMB 0.168. The Company maintained sound financial position.
• The Company achieved high quality operating results. In the first quarter, the Company's oil and gas production reached 124.6 million barrels of oil equivalent, up by 2.6% year on year, with natural gas production reaching 330.47 billion cubic feet, up by 5.3% year on year. The Company processed 62.24 million tonnes of crude oil, and total sales volume of refined oil products was 56.16 million tonnes, up by 10.1% year on year. The ethylene production was 3.347 million tonnes, and the total chemicals sales volume was 20.69 million tonnes.

Operating Review

In the first quarter of 2023, China's economy improved with gross domestic product (GDP) up by 4.5% year on year. The international crude oil prices fluctuated in a wide range and the spot price of Platt's Brent for the first quarter averaged USD81.27 per barrel, down by 19.7% year on year. The domestic demand for refined oil products rebounded rapidly, demand for natural gas maintained growth year on year, and demand for chemical products recovered.

The Company seized the favorable market opportunity, optimized the whole business chain, strengthened the coordination of production and marketing, made great efforts to expand sales, and achieved good performance. In accordance with CASs, net profit attributable to equity shareholders of the Company was RMB 20.102 billion in the first quarter of 2023. In accordance with IFRS, net profit attributable to shareholders of the Company was RMB 20.740 billion in the first quarter of 2023.

Exploration and Production: The Company intensified efforts in high quality exploration, expanded the scale of profitable production capacity, and made positive progress in maintaining oil production, increasing gas output and reducing cost. In exploration, we focused on expanding resources, increasing reserve and obtaining more exploration licenses, strengthened risk exploration in new regions and areas, and made important breakthroughs of oil and gas exploration in Shunbei, Chuanbei, and Jiyang depression. In development, we accelerated the capacity building of Shunbei and Tahe oilfields, strengthened fine-tuned development of mature oil fields, and sped up capacity building of natural gas in Western Sichuan and Southeast Sichuan. We also optimized the resources structure of LNG to reduce procurement costs, strengthened operation optimization of natural gas business, achieving a constant improvement in the profitability of whole natural gas business chain. In the first quarter, the Company's oil and gas production reached 124.6 million barrels of oil equivalent, up by 2.6% year on year, with natural gas production reaching 330.47 billion cubic feet, up by 5.3% year on year. The exploration and production segment realised an earnings before interest and tax (EBIT) of RMB 13.357 billion.

Exploration and Production	Unit	Three-month period ended 31 March		Changes
		2023	2022	(%)
Oil and gas production	million boe	124.60	121.41	2.6
Crude oil production	million barrels	69.49	69.07	0.6
China	million barrels	61.86	61.60	0.4
Overseas	million barrels	7.63	7.47	2.1
Natural gas production	billion cubic feet	330.47	313.94	5.3
Realised crude oil price	USD/barrel	75.21	89.02	(15.5)
Realised natural gas price	USD/thousand cubic feet	8.70	8.14	6.9

Conversion:

For domestic production of crude oil, 1 tonne = 7.10 barrels. For overseas production of crude oil, 1 tonne = 7.25 barrels. For production of natural gas, 1 cubic meter = 35.31 cubic feet.

Refining: The Company actively addressed the market changes, vigorously optimized production operation to maximize the overall profits along the business chain. Closely following market changes, we maintained high utilisation rate. We flexibly adjusted the procurement strategies to reduce procurement costs. We optimized the product mix and increased the exports of refined oil products. We also accelerated the construction of world-class refining bases and advanced with structural adjustment projects in an orderly manner. In the first quarter, the Company processed 62.24 million tonnes of crude oil, yielding 37.30 million tonnes of refined oil products. The refining segment realised EBIT of RMB 10.459 billion.

Refining	Unit	Three-month period ended 31 March		Changes (%)
		2023	2022
Refinery throughput	million tonnes	62.24	64.19	(3.0)
Gasoline, diesel and kerosene production	million tonnes	37.30	37.36	(0.2)
Gasoline	million tonnes	15.16	16.48	(8.0)
Diesel	million tonnes	15.58	15.72	(0.9)
Kerosene	million tonnes	6.56	5.16	27.1
Light chemical feedstock production	million tonnes	10.61	11.79	(10.0)
Light product yield	%	74.82	74.48	0.34 percentage points
Refining yield	%	94.88	95.26	(0.38) percentage points

Note: Including 100% production of domestic joint ventures.

Marketing and Distribution: The Company seized the favorable opportunity arising from the rapid recovery of demand, fully leveraged the advantages of integrated business and marketing network, strengthened resources coordination, made every effort to expand sales volume, and achieved significant improvement of the sales volume and profits. We optimised the sales network of refined oil products, made continuous efforts for the transition to an integrated energy service provider of Petro-Gas-Hydrogen-Power-Services. We continued to improve the quality and profitability for the non-fuel business. In the first quarter, total sales volume of refined oil products was 56.16 million tonnes, up by 10.1% year on year. The marketing and distribution segment realised EBIT of RMB 8.475 billion.

Marketing and Distribution	Unit	Three-month period ended 31 March		Changes (%)
		2023	2022
Total sales volume of refined oil products	million tonnes	56.16	51.02	10.1
Total domestic sales volume of refined oil products	million tonnes	44.57	41.06	8.5
Retail	million tonnes	29.36	27.34	7.4
Direct sales & Distribution	million tonnes	15.21	13.72	10.9
Annualized average throughput per station	tonnes	3,802	3,559	6.8

Note: The total sales volume of refined oil products includes the amount of trading volume.

Chemicals: Facing severe challenges resulting from the concentrated release of chemical capacity and fierce competition, the Company closely followed the market demand, optimised the structure of feedstock, facilities and products with a profit-driven orientation, maintained high utilisation rate in profitable facilities, increased production of high value-added products such as PV-grade EVA and polybutadiene rubber, and reduced products with no marginal contribution. We actively promoted the construction of advanced capacity. In the first quarter, the ethylene production was 3.347 million tonnes, and the total chemicals sales volume was 20.69 million tonnes, up by 0.2% year on year. The chemicals segment realised EBIT of RMB -3.022 billion.

Chemicals	Unit	Three-month period ended 31 March		Changes (%)
		2023	2022
Ethylene	thousand tonnes	3,347	3,606	(7.2)
Synthetic resin	thousand tonnes	4,816	4,867	(1.0)
Synthetic rubber	thousand tonnes	349	353	(1.1)
Monomers and polymers for synthetic fibre	thousand tonnes	2,034	2,491	(18.3)
Synthetic fibre	thousand tonnes	258	286	(9.8)

Note: Including 100% production of domestic joint ventures.

Capital expenditure: In the first quarter, focusing on quality and return of investment, the Company continuously optimised its investment projects, with total capital expenditures of RMB 23.40 billion. The capital expenditures of the exploration and production segment were RMB 14.98 billion, mainly used for the crude oil and gas production capacity construction in Shunbei, Tahe, Western Sichuan and Southeast Sichuan, and construction of the Shengli Shale Oil National Demonstration Zone and storage and transportation facilities of Shandong LNG. The capital expenditures of the refining segment were RMB 4.22 billion, mainly used for the expansion of Zhenhai refinery and structural adjustment of Anqing and Yangzi refineries. The capital expenditures of the marketing and distribution segment were RMB 0.78 billion, mainly used for renovation of the existing stations. The capital expenditures of the chemicals segment were RMB 3.27 billion, mainly used for ethylene projects in Tianjin Nangang and Hainan, Yizheng PTA project, caprolactam relocation project in Baling, and new material projects in Zhenhai and Tianjin, etc. The capital expenditures of the corporate and others were RMB 0.15 billion, mainly used for information technology projects.

Appendix: Principal financial data and indicators

Principal financial data and indicators prepared in accordance with CASs

	RMB million
Items		As of 31 March 2023	As of 31 December 2022 (before adjustment)		As of 31 December 2022 (adjusted)		Change (%)
Total assets		2,011,153	1,948,640		1,951,121		3.08
Total equity attributable to equity shareholders of the Company		806,963	785,577		788,471		2.35
						RMB million
		Three-month period ended 31 March 2023	Three-month period ended 31 March 2022 (before adjustment)	Three-month period ended 31 March 2022 (adjusted)			Change (%)
Operating income		791,331	771,386	771,386			2.59
Net profit attributable to equity shareholders of the Company		20,102	22,605	22,800			(11.83)
Net profit attributable to equity shareholders of the Company excluding extraordinary gains and losses		19,716	22,450	22,645			(12.93)
Net cash flow used in operating activities		(18,397)	(46,781)	(46,781)			-
Basic earnings per share (RMB)		0.168	0.187	0.188			(10.64)
Diluted earnings per share (RMB)		0.168	0.187	0.188			(10.64)
Weighted average return on net assets (%)		2.52	2.88	2.90			(0.38) percentage points

Note: In accordance with the requirements of both the Interpretation of Accounting Standards for Business Enterprises No. 16 and the Accounting Standard for Business Enterprises No. 18-Income Taxes, the Company retrospectively adjusted the relevant items of the financial statements.

Extraordinary items	During the reporting period
	(income)/expenses(RMB million)
Net gain on disposal of non-current assets	(78)
Donations	4
Government grants	(676)
Gains on holding and disposal of various investments	(181)
Other extraordinary expenses, net	257
Subtotal	(674)
Tax effect	182
Total	(492)
Attributable to:
Equity shareholders of the Company	(386)
Minority interests	(106)

Principal financial data and indicators prepared in accordance with IFRS

	RMB million
Items			As of 31 March 2023			As of 31 December 2022 (before adjustment)			As of 31 December 2022 (adjusted)	Change (%)
Total assets			2,011,153			1,948,640			1,951,121	3.08
Total equity attributable to shareholders of the Company			806,099			784,706			787,600	2.35
									RMB: million
				Three-month period ended 31 March 2023			Three-month period ended 31 March 2022 (before adjustment)	Three-month period ended 31 March 2022 (adjusted)		Change (%)
Revenue				791,331			771,386	771,386		2.59
Operating profit				31,090			32,960	32,960		(5.67)
Net profit attributable to shareholders of the Company				20,740			23,338	23,533		(11.87)
Net cash flow used in operating activities				(18,397)			(46,781)	(46,781)		-
Basic earnings per share (RMB)				0.173			0.193	0.194		(10.82)
Diluted earnings per share (RMB)				0.173			0.193	0.194		(10.82)
Return on net assets (%)				2.57			2.94	2.96		(0.39) percentage points

Note: In accordance with the requirements of the International Accounting Standards 12, the Company retrospectively adjusted the relevant items of the financial statements.

About Sinopec Corp.

Sinopec Corp. is one of the largest integrated energy and chemical companies in China. Its principal operations include the exploration and production, pipeline transportation and sale of petroleum and natural gas; the production, sale, storage and transportation of refinery products, petrochemical products, coal chemical products, synthetic fibre, and other chemical products; the import and export, including an import and export agency business, of petroleum, natural gas, petroleum products, petrochemical and chemical products, and other commodities and technologies; and research, development and application of technologies and information; hydrogen energy business and related services such as hydrogen production, storage, transportation and sales; battery charging and swapping, solar energy, wind energy and other new energy business and related services.

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.

Investor Inquiries：

Beijing
Tel：(86 10) 5996 0028
Fax：(86 10) 5996 0386
Email：ir@sinopec.com

Media Inquiries：

Hong Kong
Tel：(852) 2522 1838
Fax：(852) 2521 9955
Email sinopec@prchina.com.hk

SOURCE: China Petroleum & Chemical Corporation

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FAQ

What were Sinopec Corp.'s financial results for Q1 2023?

Sinopec Corp. reported a net profit of RMB 20.740 billion for Q1 2023, down 11.87% year-on-year.

How much oil and gas did Sinopec Corp. produce in Q1 2023?

Sinopec Corp. produced 124.6 million barrels of oil equivalent in Q1 2023.

What was the operating income for Sinopec Corp. in Q1 2023?

Sinopec Corp.'s operating income for Q1 2023 was RMB 791.331 billion.

What is the stock symbol for Sinopec Corp.?

Sinopec Corp. is listed under the stock symbol SNPMF.

How did the realized crude oil price change for Sinopec Corp. in Q1 2023?

The realized crude oil price for Sinopec Corp. dropped by 15.5% to USD 75.21 per barrel in Q1 2023.