Company Announcements

1st Quarter Results

Source: RNS
RNS Number : 8671W
China Petroleum & Chemical Corp
28 April 2021
 

 

 

 

 

China Petroleum & Chemical Corporation

The First Quarterly Report for 2021

 

 

 

 

28 April 2021

Beijing, China

 

1 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 first quarterly report for 2021 was approved at the 22th meeting of the Seventh Session of the Board of Directors of Sinopec Corp. All directors attended this meeting.

 

1.3 Mr. Zhang Yuzhuo, Chairman, Mr. Ma Yongsheng, President, Ms. Shou Donghua, Chief Financial Officer and Head of the Financial 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.

 

 

 

 

 

 

2 Basic information of Sinopec Corp.

2.1 Principal financial data and indicators

2.1.1 Principal financial data and indicators prepared in accordance with China Accounting Standards for Business Enterprises (CASs)

RMB million

Items

As of 31

March 2021

As of 31 December 2020

Changes from the end of the preceding year to the end of the reporting period (%)

Total assets

1,802,144

 1,733,805

3.9

Total equity attributable to equity shareholders of the Company

764,675

 742,463

3.0

 

 

Three-month period ended 31 March 2021

Three-month period

ended 31 March

2020 (adjusted)

Three-month period ended 31 March 2020

 (before adjustment)

Changes over the same period of preceding year(%)

Net cash flow from operating activities

 (15,578)

 (67,970)

(68,125)

-

 

Operating income

 576,982

 554,482

555,502

4.1

Net profit/ (loss) attributable to equity shareholders of the Company

 17,929

 (19,866)

(19,782)

-

Net profit/ (loss) attributable to equity shareholders of the Company excluding extraordinary gains and losses

 17,674

 (20,440)

(20,444)

-

Weighted average return on net assets(%)

2.38

(2.73)

(2.73)

5.11

percentage points

Basic earnings per share

(RMB)

0.148

 (0.164)

(0.163)

-

Diluted earnings per share

(RMB)

0.148

 (0.164)

(0.163)

-

Note: The Company has completed the formation of Sinopec Baling Petrochemical Co. Ltd in 2020. The transaction described above has been accounted as business combination under common control, thus, the Company retroactively adjusted the relevant financial data of the first quarter of 2020.

 

Extraordinary items

During the reporting period

(income)/expensesRMB million

Net gain on disposal of non-current assets

 (164)

Donations

 2

Government grants

 (636)

Gains on holding and disposal of various investments

 (108)

Other extraordinary income and expenses, net

 458

Subtotal

 (448)

Tax effect

 134

Total

 (314)

Attributable to:

 

Equity shareholders of the Company

 (255)

Minority interests

 (59)

 

2.1.2 Principal financial data and indicators prepared in accordance with International Financial Reporting Standards (IFRS)

RMB million

Items

As of 31

March 2021

As of 31 December 2020

Changes from the end of the preceding year to the end of the reporting period (%)

Total assets

1,802,144

1,733,805

3.9

Total equity attributable to shareholders of the Company

763,717

741,494

3.0

RMB: million

 

Three-month period ended 31March

2021

Three-month period ended 31 March

2020

(adjusted)

Three-month period ended 31 March

2020

(before adjustment)

Changes over the same period of the preceding year%

Net cash generated from operating activities

 (15,578)

 (67,970)

(68,125)

-

 

Operating profit/ (loss)

28,701

 (26,433)

(26,305)

-

Net profit/ (loss) attributable to shareholders of the Company

18,543

 (19,229)

(19,145)

-

Basic earnings per share (RMB)

0.153

 (0.159)

(0.158)

-

Diluted earnings per share (RMB)

0.153

 (0.159)

(0.158)

-

Return on net assets (%)

2.43

(2.70)

(2.69)

5.13

percentage points

Note: The Company has completed the formation of Sinopec Baling Petrochemical Co. Ltd in 2020. The transaction described above has been accounted as business combination under common control, thus, the Company retroactively adjusted the relevant financial data of the first quarter of 2020.

 

2.2 Total 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 517,008, including 511,331 holders of domestic A shares and 5,677 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

25,385,219,245

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

1,049,467,290

0.87

0

A share

中国人寿保险股份有限公司-传统-普通保险产品-005LCT001

813,500,331

0.67

0

A share

中国人寿保险股份有限公司-分红-个人分红-005LFH002

632,058,605

0.52

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

全国社保基金一一三组合

107,980,897

0.09

0

A share

阿布达比投资局

101,128,826

0.08

0

A share

基本养老保险基金八零二组合

81,496,100

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, which is included in the total number of the 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-分红-个人分红-005L-CT001 and 中国人寿保险股份有限公司-传统-普通保险产品-005L-FH002 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.

2.3 Review of operating results

In the first quarter of 2021, the effects of global epidemic prevention and control have gradually emerged and China's economy maintained recovery growth with gross domestic product (GDP) up by 18.3%. The spot price of Platt's Brent for the first quarter averaged USD 60.9 per barrel, up by 21.2% year on year. The domestic demand for refined oil products recovered steadily and demand for natural gas and chemical products maintained rapid growth.

 

The company expedited to implement new development concepts and world-leading development strategies and implement the "One Foundation of energy and resources, Two wings of clean fuels and advanced chemicals and Three Growth Engines in new energy, new materials and new economy" industrial deployment pattern. To promote the efficiency and profitability of the whole industrial chain and comprehensively promote high-quality development, the Company actively responded to market changes and optimized production and operations arrangements and achieved good performance.

 

In accordance with China Accounting Standards for Business Enterprises, net profit attributable to equity shareholders of the Company was RMB 17.929 billion with a basic earnings of RMB 0.148 per share. In accordance with IFRS, net profit attributable to equity shareholders of the Company was RMB 18.543 billion with a basic earnings of RMB 0.153 per share, achieving a turnaround from loss to profit as compared with the same period in 2020, and better than that of the same period in 2019.

 

Exploration and Production: The Company continuously pressed ahead with high-efficiency exploration and profit-oriented development, accelerated systematic construction of natural gas production, supply, storage and marketing and achieved tangible results in maintaining oil production, increasing gas output and cutting cost. In exploration, we continued to strengthen risk exploration in strategic areas, oil and gas rich zones and shale resources, which led to significant breakthrough of oil and gas explorations in Shunbei, Sichuan basin and etc. In crude oil development, we efficiently proceeded with the capacity building of Shunbei, west rim of Jungar oilfields and other oilfields and strengthened fine development in mature fields and intensified EOR technology application to consolidate the basis for steady production. In natural gas development, we constantly pushed forward capacity building in West Sichuan, Weirong and Dongsheng gas fields and expanded the market and sales with the sales volume for the first quarter up by 37% year on year. In the first quarter, the Company's production of oil and gas reached 117.03 million barrels of oil equivalent, up by 4.2% year on year, with natural gas production reaching 291.60 billion cubic feet, up by 16.8% year on year. The exploration and production segment realised an earnings before interest and taxes (EBIT) of RMB 3.072 billion in the first quarter, up by 54.1%.

Exploration and Production

Unit

Three-month period ended 31 March

Changes

2021

2020

(%)

Oil and gas production

million boe

117.03

112.28

4.2

Crude oil production

million barrels

68.41

70.65

(3.2)

China

million barrels

61.23

62.11

(1.4)

Overseas

million barrels

7.18

8.54

(15.9)

Natural gas production

billion cubic feet

291.60

249.68

16.8

Realised crude oil price

USD/barrel

54.89

49.15

11.7

Realised natural gas price

USD/thousand cubic feet

7.07

6.43

10.0

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 brought the advantages of integrated refining and marketing into full play, actively responded to market change, optimized production operation, dynamically adjusted export scale and kept stable operation and high utilization rate with a significant increase of crude oil  throughput. With a market oriented approach, we intensified product slate adjustment and increased output of marketable and high-profit products such as gasoline, jet-fuel, light chemical feedstock, asphalt, lubricants and etc. We optimized crude oil resources allocation and coordinated the whole process management of crude oil supply to lower procurement cost and also increased production of low-sulfur bunker fuel with an output of first quarter up by 187% and market share improving continuously. In the first quarter, the Company processed 62.52 million tonnes of crude oil, up by 16.3%. The refining segment realised EBIT of RMB 19.885 billion, achieving a turnaround from loss to profit as compared with the same period in 2020, and also better than that of the same period in 2019.

Refining

Unit

Three-month period ended 31 March

Changes

(%)

2021

2020

Refinery throughput

million tonnes

62.52

53.74

16.3

Gasoline, diesel and kerosene production

million tonnes

35.70

33.00

8.2

Gasoline

million tonnes

16.37

13.02

25.7

Diesel

million tonnes

14.34

14.19

1.1

Kerosene

million tonnes

4.99

5.79

(13.8)

Light chemical feedstock production

million tonnes

11.60

9.84

17.9

Light product yield

%

74.22

75.31

(1.09) percentage points

Refining yield

%

95.26

94.64

0.62 percentage

points

Note: Including 100% production of domestic joint ventures.

 

Marketing and Distribution: The Company brought the advantages of marketing network into full play, continuously improved marketing strategy and expanded market and increased sales with a significant increase of sales volume of refined oil products. With focus on customer needs, we vigorously adopted a differentiated marketing strategy to continuously improve retail volume. We constantly optimized the network layout to reach end users, and improved the network integrity, stability and competitiveness. We deepened non-fuel business reform and improved membership system. New model of "internet+service station+convenience store+third party operation" was promoted and more hydrogen stations were constructed with conventional service stations or alone to establish a new model of comprehensive energy supply and services, providing refined oil products, gas, hydrogen, power and services. In the first quarter, domestic sales volume of refined oil products was 40.03 million tonnes. The marketing and distribution segment realised EBIT of RMB 8.550 billion, achieving a turnaround from loss to profit as compared with the same period in 2020, and also better than that of same period in 2019.

Marketing and Distribution

Unit

Three-month period ended 31 March

Changes

(%)

2021

2020

Total sales volume of refined oil products

million tonnes

51.93

48.61

6.8

Total domestic sales volume of refined oil products

million tonnes

40.03

32.48

23.2

Retail

million tonnes

27.15

21.83

24.4

Direct sales & Distribution

million tonnes

12.88

10.65

20.9

Annualized average throughput per station

tonnes

3,536

2,844

24.3

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

 

Chemicals: The company strengthened research on market needs, dynamically optimized facilities and product chain, optimized maintenance schedule, and realised an optimal operation of producing units and utilization rate. We integrated production with marketing, further fine-tuned chemical feedstock mix and product slate, increased production of acrylonitrile, BDO and other high profitable products, and continuously increased the ratio of high value-added and high-end products with the ratio of high value-added products of synthetic fiber reaching 33.6%, up by 0.6 percentage point, the ratio of high value-added products of synthetic rubber reaching 35.5%, up by 5.2 percentage points and the ratio of high value-added products of synthetic resin reaching 67.8%, up by 1.7 percentage points. We innovated marketing model, deepened fine marketing strategy, targeted our tailored service, and further expanded the market with a significant increase in sales volume of major chemical products. In the first quarter, the ethylene production was 3.380 million tonnes, up by 11.7% year on year, and the total chemical sales volume was 19.84 million tonnes, up by 10.53%. The chemicals segment realised EBIT of RMB 8.933 billion, achieving a turnaround from loss to profit as compared with the same period of 2020, and also better than that of the same period of 2019.  

Chemicals

Unit

Three-month period ended 31 March

Changes

(%)

2021

2020

Ethylene

thousand tonnes

3,380

3,026

11.7

Synthetic resin

thousand tonnes

4,787

4,293

11.5

Synthetic rubber

thousand tonnes

322

256

25.8

Monomers and polymers for synthetic fibre

thousand tonnes

2,343

2,333

0.4

Synthetic fibre

thousand tonnes

351

266

32.0

Note: Including 100% production of domestic joint ventures.

 

Capital expenditure: In the first quarter, focusing on quality and profitability of investment, the Company continuously optimized investment projects, with total capital expenditures of RMB 23.0 billion. Capital expenditure for the exploration and production segment was RMB 9.0 billion, mainly for Fuling and Weirong natrual gas capacity building projects, Shunbei, Jiyang crude oil capacity building projects and phase II of Tianjin LNG project and phase II of Shangdong LNG project. Capital expenditure for the refining segment was RMB 7.6 billion, mainly for structural adjustment of Anqing project as well as the expansion of Zhenhai. Capital expenditure for the marketing and distribution segment was RMB 2.9 billion, mainly for construction of service stations, gas stations, comprehensive energy supply stations, refined oil products depots and non-fuel businesses. Capital expenditure for the chemicals segment was RMB 1.8 billion, mainly for construction of Zhenhai, Tianjin, Amur ethylene projects and Shanghai large-tow carbon fiber and Yizheng PTA projects. Capital expenditure for corporate and others was RMB 1.7 billion, mainly for R&D facilities and information technology projects.

 

3 Significant events

3.1 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 31

March

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

3,723

1

3,722

372,200

Increase in structured deposits

 

Derivative financial assets

21,097

12,528

8,569

68

Increase in profit position of derivative hedging financial instruments due to fluctuation of crude oil price

 

Accounts receivable

47,144

35,587

11,557

32

Increase in accounts receivable due to increase of crude oil price

 

Short-term loans

48,834

20,756

28,078

135

Increase in low-interest short-term loans for supplementary of liquidity

 

Other current liabilities

40,885

17,775

23,110

130

Issuing short-term debentures payable of RMB 30 billion for supplementary of liquidity

 

Other comprehensive income

4,719

1,038

3,681

355

Increase in fair value gain of hedging business for crude oil and difference of foreign currency statement convertion affected by changes in foreign exchange rate

 

Specific reserve

2,544

1,941

603

31

The provision of safety production fund

 

Items of Consolidated Income Statement

For three-month period ended 31 March

Increase/(Decrease)

Main reasons for changes

2021

2020

Amount

Percentage

RMB Million

RMB

Million

RMB Million

%

Research and development expenses

 2,069

 1,091

 978

90

Expand investment in research and development

Other income

 474

 1,103

 (629)

(57)

Decrease in VAT refund of imported LNG

Gains/ (losses) from

changes in fair value

 2,095

 8,342

 (6,247)

(75)

Decrease in fair value profit on derivative financial instruments not qualified as hedging

                       

 

Items of consolidated cash flow statement

Increase/(Decrease)

Main reasons for changes

2021

2020

Amount

Percentage

RMB

million

RMB

million

RMB million

%

Payments of taxes and levies

 (110,250)

 (84,926)

(25,324)

-

Increase in payments of consumption tax and other taxes

Other cash received relating to investing activities

 10,268

 19,162

 (8,894)

(46)

Decrease in value of certificate of deposit, over three months, expired and recovered

Net cash received from disposal of subsidiaries and other business entities

 4,305

 -  

 4,305

-

Balance payment of pipeline transaction received in this period

Cash paid for acquisition of investments

 (5,527)

 (1,672)

 (3,855)

-

Increase in structured deposits

Other cash paid relating to investing activities

 (7,077)

 (14,094)

 7,017

-

Decrease in the value of certificate of deposit, over three months

Cash repayments of borrowings

 (58,339)

 (173,688)

 115,349

-

Decrease in repayment of short-term loans at maturity

 

 

3.2 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

Chairman

Zhang Yuzhuo 

28 April 2021

 

 

4 Appendix

4.1 Quarterly financial statements prepared under China Accounting Standards for Business Enterprises (CASs)

Consolidated Balance Sheet

As at 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency:  RMB Type: unaudited

Items

At 31 March 2021

At 31 December 2020

Current assets:

 

 

Cash at bank and on hand        

 198,086

 184,412

Financial assets held for trading

 3,723

 1

Derivative financial assets

 21,097

 12,528

Accounts receivable

 47,144

 35,587

Receivables financing

 9,793

 8,735

Prepayments

 10,478

 4,862

Other receivables

 29,340

 33,602

Inventories

 182,477

 151,895

Other current assets

 17,841

 23,773

Total current assets

 519,979

 455,395

Non-current assets:

 

 

Long-term equity investments

 194,524

 188,342

Other equity instrument investments

 1,546

 1,525

Fixed assets

 584,545

 589,285

Construction in progress

 126,774

 124,765

Right-of-use assets

 190,945

 189,583

Intangible assets

 113,652

 114,066

Goodwill

 8,623

 8,620

Long-term deferred expenses

 9,110

 9,535

Deferred tax assets

 27,422

 25,054

Other non-current assets

 25,024

 27,635

Total non-current assets

 1,282,165

 1,278,410

Total assets

 1,802,144

 1,733,805

 

 

Consolidated Balance Sheet (Continued)

Current liabilities:

 

 

Short-term loans

 48,834

 20,756

Derivative financial liabilities

 5,002

 4,826

Bills payable

 10,045

 10,394

Accounts payable

 162,382

 151,262

Contract liabilities

 128,886

 126,160

Employee benefits payable

 11,232

 7,081

Taxes payable

 42,770

 76,843

Other payables

 83,858

 84,600

Non-current liabilities due within one year

 25,843

 22,493

Other current liabilities

 40,885

 17,775

Total current liabilities

 559,737

 522,190

Non-current liabilities:

 

 

Long-term loans

 45,296

 45,459

Debentures payable

 38,441

 38,356

Lease liabilities

 173,093

 172,306

Provisions

 46,020

 45,552

Deferred tax liabilities

 10,120

 8,124

Other non-current liabilities

 18,705

 17,942

Total non-current liabilities

 331,675

 327,739

Total liabilities

 891,412

 849,929

Shareholders' equity:

 

 

Share capital

 121,071

 121,071

Capital reserve

 122,557

 122,558

Other comprehensive income

 4,719

 1,038

Specific reserve

 2,544

 1,941

Surplus reserves

 209,280

 209,280

Retained earnings

 304,504

 286,575

Total equity attributable to shareholders of the  Company

 764,675

 742,463

Minority interests

 146,057

 141,413

Total shareholders' equity

 910,732

 883,876

Total liabilities and shareholders' equity

 1,802,144

 1,733,805

 

Zhang Yuzhuo                    Ma Yongsheng                  Shou Donghua

Chairman                         President                      Chief Financial Officer

 

 

 

 

 

Balance Sheet

As at 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Items

At 31 March 2021

At 31 December 2020

Current assets

 

 

Cash at bank and on hand

 104,062

 99,188

Derivative financial assets

 7,776

 7,776

Accounts receivable

 22,810

 21,763

Receivables financing

 526

 707

Prepayments

 4,199

 2,626

Other receivables

 41,433

 37,938

Inventories

 41,817

 39,034

Other current assets

 16,570

 14,048

Total current assets

 239,193

 223,080

Non-current assets

 

 

Long-term equity investments

 345,122

 343,356

Other equity instrument investments

 428

 428

Fixed assets

 280,394

 283,695

Construction in progress

 59,667

 59,880

Right-of-use assets

 108,617

 108,737

Intangible assets

 8,685

 8,779

Long-term deferred expenses

 2,287

 2,499

Deferred tax assets

 14,282

 12,661

Other non-current assets

 29,109

 26,828

Total non-current assets

 848,591

 846,863

Total assets

 1,087,784

 1,069,943

Current liabilities

 

 

Short-term loans

 34,394

 20,669

Derivative financial liabilities

 362

 362

Bills payable

 5,461

 6,061

Accounts payable

 70,511

 65,779

Contract liabilities

 5,701

 5,840

Employee benefits payable

 4,172

 1,673

Taxes payable

 22,856

 43,500

Other payables

 171,126

 188,568

Non-current liabilities due within one year

 13,364

 12,026

Other current liabilities

 30,400

 439

Total current liabilities

 358,347

 344,917

 

 

Company Balance Sheet (Continued)

 

Non-current liabilities

 

 

Long-term loans

 29,858

 30,413

Debentures payable

 26,980

 26,977

Lease liabilities

 105,153

 105,691

Provisions

 36,474

 36,089

Other non-current liabilities

 3,517

 3,581

Total non-current liabilities

 201,982

 202,751

Total liabilities

 560,329

 547,668

Shareholders' equity

 

 

Share capital

 121,071

 121,071

Capital reserve

 68,996

 68,976

Other comprehensive income

 9,104

 5,910

Specific reserve

 1,448

 1,189

Surplus reserves

 209,280

 209,280

Retained earnings

 117,556

 115,849

Total shareholders' equity

 527,455

 522,275

Total liabilities and shareholders' equity

 1,087,784

 1,069,943

 

Zhang Yuzhuo                    Ma Yongsheng                  Shou Donghua

Chairman                         President                      Chief Financial Officer

 

 

 

 

Consolidated Income Statement

For the three-month period ended 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Items

Three-month period

ended 31 March 2021

Three-month period

ended 31 March 2020

I. Operating income

 576,982

 554,482

II. Total Operating costs

 549,384

 582,239

Including: Operating costs

 449,200

 497,745

Taxes and surcharges

 60,396

 50,104

Selling and distribution expenses

 16,054

 14,662

General and administrative expenses

 16,790

 14,334

Research and development costs

 2,069

 1,091

Financial expenses

 2,379

 2,035

Exploration expenses,

including dry holes

 2,496

 2,268

Add: Other income

 474

 1,103

Investment income

 (76)

 153

Gains from changes in fair value

 2,095

 8,342

Credit impairment losses

 14

 5

Impairment losses

 11

 (10,360)

Asset disposal gains

 164

 60

III. Operating profit/(loss)

 30,280

 (28,454)

Add: Non-operating income

304

 216

Less: Non-operating expenses

597

 476

IV. Profit/(loss) before taxation

 29,987

 (28,714)

Less: Income tax expense

 7,082

 (7,529)

V. Net profit/(loss)

 22,905

 (21,185)

Classification by going concern:

 

 

(i) Net profit/(loss) from continuous operation

 22,905

 (21,185)

(ii) Net profit from discontinued operation

-

 -

Classification by ownership:

 

  

(i) Equity shareholders of the Company

 17,929

 (19,866)

(ii) Minority interests

 4,976

 (1,319)

 

 

 

 

Consolidated Income Statement (Continued)

VI. Other comprehensive income                      

 4,857

 (7,360)

Items that may not be reclassified

 subsequently to profit or loss:

 

 

 Changes in fair value of other

  equity instrument investments

 20

-  

Items that may be reclassified

 subsequently to profit or loss:

 

 

Other comprehensive income that can

 be converted into profit or loss under

 the equity method

 (135)

 (76)

Fair value hedges

 (20)

-

Cash flow hedges

 4,627

 (8,401)

Foreign currency translation differences

 365

 1,117

VII. Total comprehensive income

 27,762

 (28,545)

Equity shareholders of the Company

 22,451

 (27,187)

Minority interests

 5,311

 (1,358)

VIII. Earnings per share:                                         

 

 

(i) Basic earnings per share (RMB/Share)

0.148

(0.164)

(ii) Diluted earnings per share (RMB/Share)

0.148

(0.164)

 

Zhang Yuzhuo                    Ma Yongsheng                  Shou Donghua

Chairman                         President                      Chief Financial Officer

 

 

 

Income Statement

For the three-month period ended 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Items

Three-month period

ended 31 March 2021

Three-month period

ended 31 March 2020

I. Operating income

 227,855

 199,942

Less: Operating costs

 176,554

 171,987

Taxes and surcharges

 36,511

 32,996

Selling and distribution expenses

 967

 724

General and administrative expenses

 7,922

 6,992

Research and development costs

 1,956

 1,034

Financial expenses

 2,629

 2,050

    Exploration expenses, including dry holes

 2,056

 1,936

Add: Other income

 232

 896

Investment income

 3,058

 814

Gains from changes in fair value

 288

 400

Credit impairment losses

 1

 31

Impairment losses

 (1)

 (7,992)

Asset disposal gains

 -  

 1

II. Operating profit/(loss)

 2,838

 (23,627)

Add: Non-operating income

 99

 33

Less: Non-operating expenses

 311

 232

III. Profit/(loss) before taxation

 2,626

 (23,826)

Less: Income tax expense

 918

 (6,002)

IV. Net profit/(loss)

 1,708

 (17,824)

(i) Net profit/(loss) from continuous operation

 1,708

 (17,824)

(ii) Net profit from discontinued operation

 -  

 -

V. Other comprehensive income

 3,514

 (7,387)

  Items that may be reclassified subsequently

to profit or loss

 

 

Other comprehensive loss that can be converted into profit or loss under

the equity method

 7

 49

Cash flow hedges

 3,507

 (7,436)

VI. Total comprehensive income

 5,222

 (25,211)

 

Zhang Yuzhuo                    Ma Yongsheng                  Shou Donghua

Chairman                         President                      Chief Financial Officer

 

 

 

 

Consolidated Cash Flow Statement

For the three-month period ended 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Items

Three-month period

ended 31 March 2021

Three-month period

ended 31 March 2020

I. Cash flows from operating activities:

 

 

Cash received from sale of goods and rendering of services

 605,032

 598,622

Refund of taxes and levies

 39

 818

Other cash received relating to operating activities

 37,445

 35,349

Sub-total of cash inflows

 642,516

 634,789

Cash paid for goods and services

 (485,354)

 (541,718)

Cash paid to and for employees

 (18,036)

 (17,033)

Payments of taxes and levies

 (110,250)

 (84,926)

Other cash paid relating to operating

activities

 (44,454)

 (59,082)

Sub-total of cash outflows

 (658,094)

 (702,759)

Net cash flow from operating activities

 (15,578)

 (67,970)

II. Cash flows from investing activities:

 

 

Cash received from disposal of investments

 177

 3,402

Cash received from returns on investments

 895

 986

Net cash received from disposal of fixed assets, intangible assets and other long-term assets

 324

 18

Other cash received relating to investing

activities

 10,268

 19,162

Net cash received from disposal of subsidiaries and other business entities

4,305

-

Sub-total of cash inflows

15,969

 23,568

Cash paid for acquisition of fixed assets, intangible assets and other long-term assets

 (27,417)

 (22,350)

Cash paid for acquisition of investments

 (5,527)

 (1,672)

Other cash paid relating to investing

activities

 (7,077)

 (14,094)

Sub-total of cash outflows

(40,021)

 (38,116)

Net cash flow from investing activities

(24,052)

 (14,548)

III. Cash flows from financing activities:

 

 

Cash received from capital contributions

 124

 260

Including: Cash received from minority shareholders' capital contributions to subsidiaries

 48

 260

Consolidated Cash Flow Statement (Continued)

 

Cash received from borrowings             

 114,768

 275,885

Other cash received relating to financing activities

 7

 276

Sub-total of cash inflows

114,899

 276,421

Cash repayments of borrowings

(58,339)

 (173,688)

Cash paid for dividends, profits distribution or interest

 (1,784)

 (1,583)

Including: Subsidiaries' cash payments for distribution of dividends or profits to minority shareholders

 (840)

 (160)

Other cash paid relating to financing

activities

 (3,662)

 (3,492)

Sub-total of cash outflows

 (63,785)

 (178,763)

Net cash flow from financing activities

51,114

 97,658

IV. Effects of changes in foreign exchange rate

204

 553

V. Net increase in cash and cash equivalents

11,688

 15,693

Add: Initial balance of cash and cash equivalents

87,559

 60,438

VI. Ending balance of cash and cash equivalents

99,247

 76,131

 

 

Zhang Yuzhuo                    Ma Yongsheng                  Shou Donghua

Chairman                         President                      Chief Financial Officer

 

 

 

Cash Flow Statement

For the three-month period ended 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Items

Three-month period

ended 31 March 2021

Three-month period

ended 31 March 2020

I. Cash flows from operating activities:

 

 

Cash received from sale of goods and rendering of services

249,027

 217,331

Refund of taxes and levies

21

 798

Other cash received relating to operating activities

6,966

 1,619

Sub-total of cash inflows

256,014

 219,748

Cash paid for goods and services

(184,870)

 (175,248)

Cash paid to and for employees

(9,474)

 (8,835)

Payments of taxes and levies

(63,405)

 (53,244)

Other cash paid relating to operating activities

(6,431)

 (5,349)

Sub-total of cash outflows

(264,180)

 (242,676)

Net cash flow from operating activities

(8,166)

 (22,928)

II. Cash flows from investing activities:

 

 

Cash received from disposal of investments

4,399

 4,759

Cash received from returns on investments

1,567

 1,224

Net cash received from disposal of fixed assets, intangible assets and other long-term assets

17

 3

Other cash received relating to investing activities

26,174

 44,575

Sub-total of cash inflows

32,157

 50,561

Cash paid for acquisition of fixed assets, intangible assets and other long-term assets

(11,540)

 (9,307)

Cash paid for acquisition of investments

(9,795)

 (2,807)

Other cash paid relating to investing activities

(26,479)

 (47,607)

Sub-total of cash outflows

(47,814)

 (59,721)

Net cash flow from investing activities

(15,657)

 (9,160)

III. Cash flows from financing activities:

 

 

Cash received from borrowings

73,395

 130,458

Other cash received relating to financing activities

307,581

 57,475

Sub-total of cash inflows

380,976

 187,933

Cash repayments of borrowings

(30,225)

 (66,328)

Cash paid for dividends or interest

(2,005)

 (875)

Other cash paid relating to financing activities

(318,350)

 (72,108)

Sub-total of cash outflows

(350,580)

 (139,311)

Net cash flow from financing activities

30,396

 48,622

 

 

Cash Flow Statement (Continued)

IV. Net increase in cash and cash equivalents

6,573

16,534

AddInitial balance of cash and cash equivalents

28,081

38,616

V. Ending balance of cash and cash equivalents

34,654

55,150

 

 

Zhang Yuzhuo                    Ma Yongsheng                  Shou Donghua

Chairman                         President                      Chief Financial Officer

 

 

 

 

Segment Reporting

For the three-month period ended 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Items

Three-month period

ended 31 March 2021

Three-month period

ended 31 March 2020

Income from principal operations

 

 

Exploration and production

 

 

External sales

34,776

26,944

Inter-segment sales

18,812

18,238

Subtotal

53,588

45,182

Refining

 

 

External sales

37,727

25,145

Inter-segment sales

259,339

217,468

Subtotal

297,066

242,613

Marketing and distribution

 

 

External sales

         278,914

         248,725

Inter-segment sales

1,359

        1,226

Subtotal

         280,273

         249,951

Chemicals

 

 

External sales

          95,550

        71,652

Inter-segment sales

      14,102

       15,354

Subtotal

         109,652

          87,006

Corporate and others

 

 

External sales

         114,257

         169,142

Inter-segment sales

         161,530

         131,839

Subtotal

         275,787

         300,981

   Elimination of inter-segment sales

       (455,142)

       (384,125)

Consolidated income from principal operations

         561,224

         541,608

Income from other operations

 

 

Exploration and production

          1,754

        1,272

Refining

         1,148

            932

Marketing and distribution

          9,877

        6,939

Chemicals

          2,604

       3,405

Corporate and others

            375

           326

Consolidated income from other operations

          15,758

        12,874

Consolidated operating income

         576,982

         554,482

 

 

Segment Reporting (Continued)

Operating profit/(loss)

 

 

By segment

 

 

Exploration and production

            1,885

             404

Refining

           19,656

         (26,299)

Marketing and distribution

            8,009

       (2,621)

Chemicals

            6,852

         (1,894)

Corporate and others

            1,300

         (5,667)

   Elimination

          (7,700)

                -  

Total segment operating profit/(loss)

           30,002

         (36,077)

Investment income

 

 

Exploration and production

             803

     476

Refining

            (10)

  (680)

Marketing and distribution

             269

      657

Chemicals

            1,828

          (66)

Corporate and others

          (2,966)

      (234)

Total segment investment income

            (76)

     153

Financial expenses

         (2,379)

       (2,035)

Gains/(losses) from changes in fair value

            2,095

        8,342

Asset disposal gains/(losses)

             164

               63

Other income

             474

         1,100

Operating profit/(loss)

           30,280

         (28,454)

Add: Non-operating income

             304

        216

Less: Non-operating expenses

             597

           476

Profit/(loss) before taxation

           29,987

         (28,714)

 

 

 

4.2  Quarterly financial statements prepared under International Financial Reporting Standards (IFRS)

Consolidated Income Statement

For the three-month period ended 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Items

Three-month period

ended 31 March 2021

Three-month period

ended 31 March 2020

Turnover and other operating revenues

 

 

   Turnover

561,224

 541,608

   Other operating revenues

15,758

 12,874

   Subtotal

576,982

 554,482

Operating expenses

 

 

   Purchased crude oil, products and

operating supplies and expenses

 (422,730)

 (482,608)

   Selling, general and administrative expenses

 (12,358)

 (10,505)

   Depreciation, depletion and amortisation

 (26,536)

 (25,157)

   Exploration expenses, including dry holes

 (2,496)

 (2,268)

   Personnel expenses

 (21,774)

 (19,147)

   Taxes other than income tax

 (60,396)

 (50,105)

   Other operating (expense)/revenue, net

 (1,991)

 8,875

Total operating expenses

 (548,281)

 (580,915)

Operating profit/(loss)

 28,701

 (26,433)

Finance costs

 

 

Interest expense

 (3,684)

 (3,922)

Interest income

 1,297

 1,086

Foreign currency exchange loss, net

 8

 801

Net finance costs

 (2,379)

 (2,035)

Investment income  

 68

 29

Share of profits less losses from associates and joint ventures

 4,311

 472

Profit /(loss) before taxation

 30,701

 (27,967)

Income tax expense

 (7,082)

 7,529

Profit /(loss) for the period

 23,619

 (20,438)

Attributable to

 

 

Owners of the Company

18,543

 (19,229)

Non-controlling interests

5,076

 (1,209)

Profit /(loss)for the period

 23,619

 (20,438)

Earnings per share

 

 

Basic earnings per share (RMB)

0.153

 (0.159)

Diluted earnings per share (RMB)

0.153

 (0.159)

Consolidated Statement of Comprehensive Income

For the three-month period ended 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Items

Three-month period

ended 31 March 2021

Three-month period

ended 31 March 2020

Profit for the period

23,619

 (20,438)

Other comprehensive income:

4,857

 (7,360)

Items that may not be reclassified subsequently to profit or loss:

 

 

Equity investments at fair value through other comprehensive income

 20

 -

Items that may be reclassified subsequently to profit or loss:

 

 

Fair value hedges

 (20)

-

Share of other comprehensive income of associates and joint ventures

 (135)

 (76)

Cash flow hedges

 4,627

 (8,401)

Foreign currency translation differences

 365

 1,117

Total comprehensive income

 28,476

(27,798)

Attributable to:

 

 

Shareholders of the Company

 23,065

 (26,550)

Non-controlling interests

 5,411

 (1,248)

 

 

 

 

Consolidated Balance Sheet

For the three-month period ended 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Items

At 31 March 2021

At 31 December 2020

Non-current assets

 

 

Property, plant and equipment, net

584,395

589,247

Construction in progress

126,774

124,765

Right-of-use assets

268,061

266,368

Goodwill

8,623

8,620

Interest in associates

138,308

136,163

Interest in joint ventures

56,216

52,179

Financial assets at fair value through other
comprehensive income

1,546

1,525

Deferred tax assets

27,422

25,054

Long-term prepayments and other non-current assets

70,820

74,489

Total non-current assets

1,282,165

1,278,410

Current assets:

 

 

Cash and cash equivalents

99,247

87,559

Time deposits with financial institutions

98,839

100,498

Financial assets at fair value through profit and
loss

3,723

1

Derivatives financial assets

21,097

12,528

Trade accounts receivable and bills receivable

47,144

35,587

Financial assets at fair value through other
comprehensive income

9,793

8,735

Inventories

182,477

151,895

Prepaid expenses and other current assets

57,659

58,592

Total current assets

519,979

455,395

Current liabilities

 

 

Short-term debts

74,991

23,769

Loans from Sinopec Group Company and fellow
subsidiaries

10,790

5,264

Lease liabilities

16,961

15,292

Derivatives financial liabilities

5,002

4,826

Trade accounts payable and bills payable

172,427

161,656

Contract liabilities

128,886

126,160

Other payables

143,519

178,637

Income tax payable

7,161

6,586

Total current liabilities

559,737

522,190

Consolidated Balance Sheet (Continued)

Net current liabilities

         39,758

66,795

Total assets less current liabilities

1,242,407

1,211,615

Non-current liabilities

 

 

Long-term debts

72,041

72,037

Loans from Sinopec Group Company and fellow subsidiaries

11,696

11,778

Lease liabilities

173,093

172,306

Deferred tax liabilities

10,120

8,124

Provisions

46,020

45,552

Other non-current liabilities

19,711

18,960

Total non-current liabilities

332,681

328,757

Total net assets

909,726

882,858

Equity

 

 

Share capital

121,071

121,071

Reserves

642,646

620,423

Total equity attributable to shareholders of the Company

763,717

741,494

Non-controlling interests

146,009

141,364

Total equity

909,726

882,858

 

 

 

Consolidated Cash Flow Statement

For the three-month period ended 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Items

Net cash generated from operating activities(a)

(15,578)

 (67,970)

Investing activities

 

 

Capital expenditure

 (20,561)

 (20,455)

Exploratory wells expenditure

 (6,856)

 (1,895)

Purchase of investments, investments in associates and investments in joint ventures

(2,327)

 (1,672)

Payment for financial assets at fair value through profit or loss

(3,200)

-

Proceeds from disposal of investments and investments in associates

4,482

 3,402

Proceeds from disposal of property, plant, equipment and other non-current assets

324

 18

Increase in time deposits with maturities over three months

 (4,748)

 (13,912)

Decrease in time deposits with maturities over three months

9,359

 18,553

Interest received

287

 609

Investment and dividend income received

895

 986

Repayments of other investing activities

 (1,707)

 (182)

Net cash used in investing activities

(24,052)

 (14,548)

Financing activities

 

 

Proceeds from bank and other loans

114,768

 275,885

Repayments of bank and other loans

 (58,339)

 (173,688)

Contributions to subsidiaries from non-controlling interests

124

 260

Distributions by subsidiaries to non-controlling interests

(840)

 (160)

Interest paid

(944)

 (1,423)

Payments made to acquire non-controlling interests

-

 (1,117)

Repayments of lease liabilities

(3,649)

 (2,375)

(Repayments)/proceeds from other financing activities

  (6)  

 276

Net cash used in financing activities

 51,114

 97,658

Net increase in cash and cash equivalents

 11,484

 15,140

Cash and cash equivalents at 1 January

87,559

 60,438

Effect of foreign currency exchange rate changes

 204

 553

Cash and cash equivalents at 31 March

99,247

76,131

 

Note to consolidated statement of Cash Flows

For the three-month period ended 31 March 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

Three-month period ended 31

March 2021

Three-month period ended 31

March 2020

Operating activities

 

 

Profit before taxation

 30,701

 (27,967)

Adjustments for:

 

  

Depreciation, depletion and amortisation

 26,536

 25,157

Dry hole costs written off

 1,222

 1,863

Share of profits from associates and joint ventures

 (4,311)

 (472)

Investment income

 (68)

 (29)

Interest income

 (1,297)

 (715)

Interest expense

 3,684

 3,684

Gain on foreign currency exchange rate changes and
 derivative financial instruments

(2,087)

 (8,589)

Gain on disposal of property, plant, equipment and
 other non-current assets, net

 (164)

 (3)

Impairment (reversal)/loss on assets

 (11)

 10,360

Credit impairment reversal

(14)

 (5)

Operating profit before change of operating capital

54,191

3,284

Accounts receivable and other current assets

(13,918)

 (48,286)

Inventories

 (30,619)

 (501)

Accounts payable and other current liabilities

(22,509)

 (17,410)

Subtotal

 (12,855)

 (62,913)

Income tax paid

(2,723)

 (5,057)

Net cash generated from operating activities

 (15,578)

 (67,970)

 

 

 

 

 

                                                                                                                           

 

 

 

 

 

 

 

Segment Reporting

For the three-month period ended 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Items

Three-month period

ended 31 March 2021

Three-month period

ended 31 March 2020

Turnover

 

 

Exploration and production

 

 

External sales

        34,776

         26,944

Inter-segment sales

        18,812

         18,238

Subtotal

        53,588

         45,182

Refining

 

 

External sales

        37,727

         25,145

Inter-segment sales

      259,339

       217,468

Subtotal

      297,066

       242,613

Marketing and distribution

 

 

External sales

      278,914

       248,725

Inter-segment sales

          1,359

           1,226

Subtotal

      280,273

       249,951

Chemicals

 

 

External sales

        95,550

         71,652

Inter-segment sales

        14,102

         15,354

Subtotal

      109,652

         87,006

Corporate and others

 

 

External sales

      114,257

       169,142

Inter-segment sales

      161,530

       131,839

Subtotal

      275,787

       300,981

Elimination of inter-segment sales

     (455,142)

      (384,125)

Turnover

      561,224

       541,608

Other operating revenues

 

 

Exploration and production

          1,754

           1,272

Refining

          1,148

              932

Marketing and distribution

          9,877

           6,939

Chemicals

          2,604

           3,405

Corporate and others

             375

              326

Other operating revenues

        15,758

         12,874

Turnover and other operating revenues

      576,982

       554,482

Result

 

 

Operating profit/(loss)

 

 

Segment Reporting (Continued)

By segment

 

 

Exploration and production

          2,356

           1,518

Refining

        19,487

        (25,794)

Marketing and distribution

          8,021

          (1,536)

Chemicals

          7,104

          (1,696)

Corporate and others

            (567)

           1,075

Elimination

         (7,700)

                 -  

Total segment operating profit/(loss)

        28,701

        (26,433)

Share of profits from associates and joint ventures

 

 

Exploration and production

             656

              476

Refining

             412

             (682)

Marketing and distribution

             525

              287

Chemicals

          1,795

               (76)

Corporate and others

             923

              467

Aggregate share of profits from associates and joint ventures

          4,311

              472

Investment income/(losses)

 

 

Exploration and production

               60

                 -  

Refining

              (14)

                  2

Marketing and distribution

                 4

                14

Chemicals

               34

                  8

Corporate and others

              (16)

                  5

Aggregate investment income

               68

                29

Net finance costs

         (2,379)

         (2,035)

Profit/(loss) before taxation

        30,701

       (27,967)

 

 

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

Three-month period

ended 31 March 2021

Three-month period

ended 31 March 2020

Net profit/(loss) under CASs

 22,905

 (21,185)

Adjustments:

 

 

Government grants(i)

 12

 12

Safety production fund(ii)

 702

 735

Profit/(loss) for the period under IFRS

 23,619

 (20,438)

 

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 31 March 2021

    As of 31 December 2020

Shareholders' equity under CASs

 910,732

 883,876

Adjustments:

 

 

Government grants(i)

 (1,006)

 (1,018)

Total equity under IFRS

 909,726

 882,858

 

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