SNP.L Regulatory News (SNP)

30 Oct 2007 07:00

China Petroleum & Chemical Corp30 October 2007 (a joint stock limited company incorporated in the People's Republic of China with limited liability) ANNOUNCEMENT Third Quarterly Results for 2007 Pursuant to the regulations of the China Securities Regulatory Commission, ChinaPetroleum & Chemical Corporation is required to publish a quarterly report foreach of the first and third quarters. This announcement is made pursuant to Rule 13.09 of the Rules Governing theListing of Securities on The Stock Exchange of Hong Kong Limited. 1 Important reminder 1.1 The Board of Directors, the Supervisory Committee, directors, supervisorsand senior management, of China Petroleum & Chemical Corporation ("Sinopec Corp.") hereby declare that there are no false statements, misleadinginformation or material omissions in this report, and they are jointly andseverally responsible, for the authenticity, accuracy and completeness of thisreport. 1.2 This report was scrutinised and approved on the 16th meeting of the ThirdBoard of Directors of SINOPEC CORP.. All directors of the Company attended themeeting. 1.3 The financial statements in this report has not been audited. 1.4 Mr. Su Shulin, Chairman of the Board of Directors, Mr. Wang Tianpu,President, Mr. Dai Houliang, Director, Senior Vice President and Chief FinancialOfficer, and Mr. Liu Yun, head of the Accounting Department, warrant theauthenticity and completeness of the financial statements under this QuarterlyReport. 2 SINOPEC CORP. Profile 2.1 Principal financial data and indicators 2.1.1 Principal financial data and indicators prepared in accordance with thePRC Accounting Standards for Business Enterprises ("ASBE"). At 30 September 2007 At 31 December 2006 Changes compared with the preceding year-end (%)Total assets (RMB millions) 660,279 596,527 10.69Shareholders' equity (excluding minority 292,874 257,893 13.56interests)funds attributable to equityshareholders of the Company (RMBmillions)Net assets per share (RMB/share) 3.378 2.974 13.56Adjusted net assets per share (RMB/ 3.317 2.901 14.34share) Three-month period as at Nine-month period as at 30 September 30 September (July - September) (January - September) Year 2007 Year 2006 Year-on-year Year 2007 Year Year-on-year changes (%) 2006 changes (%)Net cash flow from operating activities 38,280 23,780 60.98 102,277 47,973 113.20(RMB millions)Net cash flow from operating activities 0.442 0.274 60.98 1.180 0.553 113.20per share (RMB)Net profit attributable to the equity 13,758 12,764 7.79 48,683 33,889 43.65shareholders of the Company (RMBmillions)Basic earnings per share (RMB/share) 0.159 0.147 7.79 0.561 0.391 43.65Diluted earnings per share (RMB/share) 0.159 0.147 7.79 0.561 0.391 43.65Basic earnings per share (before 0.157 0.149 5.37 0.559 0.394 41.88extraordinary items) (RMB/share)Return on net assets (%) 4.70 5.33 (0.63) percentage 16.62 14.16 2.46 percentage points pointsReturn on net assets (before 4.64 5.41 (0.77) percentage 16.56 14.28 2.28 percentageextraordinary items) (%) points points Extraordinary profits/losses items Nine-month period as at 30 September 2007 (RMB millions)Gain on disposal of investments (864)Written back of provisions for impairment losses in previous (324)yearsEmployee reduction expenses 232Non-operating expenses (excluding impairment losses on assets 986provided in accordance with ASBE)Of which: Losses on disposal of fixed assets 383Donations 90Non-operating income (302)Tax effect 90Total (182) 2.1.2 Principal financial data and indicators prepared in accordance withInternational Financial Reporting Standards ("IFRS") At 30 September 2007 At 31 December 2006 Changes compared with the preceding year-end (%)Total assets (RMB millions) 672,574 603,077 11.52Total equity attributable to equity 298,907 262,845 13.72shareholders of the Company (RMBmillions)Net assets per share (RMB/share) 3.448 3.031 13.72Adjusted Net assets per share (RMB/ 3.387 2.958 14.50share) Three-month period as at Nine-month period as at 30 September 30 September (July September) (January September) Year 2007 Year 2006 Year-on-year Year 2007 Year 2006 Year-on-year changes (%) changes (%)Net cash flow from operating 36,850 24,691 49.24 98,486 43,760 125.06activities (RMB millions)Profit attributable to the equity 13,628 12,917 5.50 49,818 34,787 43.21shareholders of the Company (RMBmillions)Basic earnings per share (RMB/share) 0.157 0.149 5.50 0.575 0.401 43.21Return on net assets (%) 4.56 5.21 (0.65) 16.67 14.04 2.63 percentage percentage points points 2.2 Differences between net profit for the first three quarters of 2007 andshareholder's equity as at 30 September, 2007 under ASBE and IFRS 2.2.1 Analysis of effects of major differences between the net profit under ASBEand the profit of the period under IFRS Items Nine-month period as at September 30 Year 2007 Year 2006 RMB millions RMB millionsNet profit under ASBE 50,473 34,147Adjustments:Oil and gas properties (39) 1,510Reduced amortization on revaluation of land use rights 23 23Effects of the above adjustment on taxation and effects of tax rate 1,154 (363)changes on deferred taxesProfit for the period under IFRS 51,611 35,317 2.2.2 Analysis of effects of major differences between the shareholders' equityunder ASBE and that under IFRS Items At 30 September 2007 At 31 December 2006 RMB millions RMB millionsShareholders' fund under ASBE 317,110 279,931Adjustments:Oil and gas properties 10,777 10,816Revaluation of land use rights (1,049) (1,072)Effects of the above adjustment on taxation and effects of tax (3,769) (4,886)rate changes on deferred taxesTotal equity under IFRS 323,069 284,789 2.3 Number of shareholders and top ten shareholders holding shares withoutselling restrictions at the end of the reporting period Number of shareholders at the end of the reporting 618,763, including 611,621 holders of A shares and 7,142 holdersperiod of H shares. Top ten shareholders holding shares without selling restrictions Name of shareholders (full name) Quantity of tradable shares in Type of shares (A, H share possession as at the end of this or others) reporting period (10,000 shares)HKSCC (Nominees) Limited 1,669,686.9 HBosera Thematic Sector Equity Securities Investment 6,707.6 AFundChina Post Core Growth Equity Securities Investment 5,739.9 AFundChina Life Insurance Company Limited-- 5,000.0 ADividend--Individual Dividend--005L-- FH002 ShanghaiNational Social Security Fund 106 Group 4,500.0 ALORD Value Advantage Stock Investment Fund 3,895.7 AChina Post Preferred Equity Securities Investment 3,769.2 AFundFortune SGAM Selected Sectors Fund 3,500.0 AE Fund 50 Index Equity Investment Fund 3,450.7 AChangxin Golden Profit Trend Stock Investment Fund 3,000.1 A 2.4 Review of operating results In the first three quarters of 2007, China's national economy continued to growat a fast pace. For instance, its GDP rose by 11.5%, whilst the domestic demandsfor petroleum and petrochemical products both kept climbing considerably. In thethird quarter, the Company strengthened the link between production, managementand marketing, distribution, solidly promoted the construction of key works andwhile continued its efforts on energy saving and reduction of pollutantdischarge, thereby ensuring safe production and market supply and achievedsatisfactory operating results in spite of the pressure brought by thecontinuous rise of international crude oil price. Meanwhile, the companymaintained increases in production of crude oil processed, sales volume ofrefined oil products, and production of ethylene and synthetic reins. Exploration & Production Segment: Seizing the opportunity brought by the highcrude oil price, our company has accelerated its increase of production capacityand development of low quality crude oil reserves, leading to an increase of2.23% and 11.73% over the same period last year respectively in the output ofcrude oil and natural gas. The key national project "Sichuan-to-East China GasTransport" also commenced. Refining Segment: The company actively optimized resource allocation, productstructure and processing of crude oil, increase the output of refined oil andensure market supply. The amount of refined oil increased by 6.52% over the sameperiod last year. Marketing and Distribution Segment: The Company strengthened both domestic andoverseas resource co-ordination to ensure a stable and orderly supply to thedomestic market, utilised the modern logistic systems such as finished oilpipelines, optimized coordination of the transportation of refined oil andfurther optimized the marketing structure. In the first three quarters of 2007,the Company's domestic sales and retail volume of refined oil products increasedby 6.63% and 4.56% respectively over the same period last year. Chemicals Segment: The major chemical production facilities of the Companymaintained stable full-load operation. The output of principal products as wellas high value-added products increased steadily. The Company also took advantageof its branches which specialise in sales of chemicals, and brought out thecompetitive force of centralized sales. In the first three quarters of 2007, theoutput of ethylene and that of synthetic resins have grown by 7.80% and 14.61%respectively over the same period last year. Summary of Principal Operating Results for the First Three Quarters Operating Data Unit Nine-month period as at Year-on-year changes September 30 Year 2007 Year 2006 (%)Exploration and ProductionCrude oil production Million tonnes 30.69 30.01 2.23Nature gas production Hundred million cubic 59.76 53.48 11.74 metersCrude oil price realized RMB / Tonne 2,955.57 3,388.03 -12.76%Natural gas price realized RMB / Thousand cubic 809.94 750.70 7.89% metersRefiningProcessing volume of crude oil Million tonnes 115.80 108.70 6.53Production output of gasoline, diesel Million tonnes 68.83 64.73 6.33oil and keroseneOf which: Gasoline Million tonnes 18.41 16.97 8.49 Diesel oil Million tonnes 44.11 43.01 2.56 Kerosene Million tonnes 6.31 4.75 32.84Production output of chemical light oil Million tonnes 17.98 17.16 4.78Recovery rate of light oil % 74.41% 74.64% -0.23 percentTotal rate of commodification % 93.77% 93.63% 0.14 percentMarketing and DistributionTotal domestic distribution volume of Million tonnes 88.57 83.06 6.63finished oil productsOf which: Retail volume Million tonnes 55.82 53.39 4.55 Distribution volume Million tonnes 15.46 14.49 6.69 Wholesale volume Million tonnes 17.28 15.18 13.83Total number of petrol stations Station 28,976 28,546 1.51Of which: Owned and self-operated Station 28,280 27,746 1.92 Franchised Station 696 800 -12.5Fueling charge per petrol station (Note Tonne/station 2,632 2,566 2.571)Chemicals (Note 2)Production output of ethylene Thousand tonnes 4,887 4,534 7.79Production output of synthetic resins Thousand tonnes 7,207 6,289 14.60Production output of synthetic rubber Thousand tonnes 546 490 11.43Synthetic fiber monomers and polymers Thousand tonnes 5,921 5,401 9.63Synthetic fibers Thousand tonnes 1,074 1,137 -5.54Urea Thousand tonnes 1,229 1,321 -6.96 Notes 1: The fueling charge per petrol station figures refer to annual averageamounts; Notes 2: Including 100% outputs of Yangtze-BASF and Shanghai Secco. Capital expenditure: In the first three quarters of 2007, the company's accumulative capitalexpenditure was RMB 59.910 billion, of which the capital expenditure ofExploration and Production Segment is RMB 30.807 billion. In terms of oil andnatural gas exploration, by using more intensive and carpet-to-carpetprospecting and focusing in new reserve zones, a series of significant resultshave been achieved., Newly-built production capacity of crude oil reached 4.51million tonnes/year, and newly-built production capacity of natural gas reached0.985 billion cubic meters/year. The capital expenditure of the Refining Segmentwas approximately RMB 12.178 billion. The Refinery in Yanshan was upgradedto10-megatone level and commenced production; Refinery projects in Qingdao,Luoyang, Wuhan, Gaoqiao and other places as well as oil jetty projects areprogressing smoothly. Capital expenditure of the Chemical Segment was RMB 7.207billion. The Maoming high pressure polyethylene (BPPE) project, Shanghai glycolproject and Yangtse-Jinpu GR-S project were completed and commenced production,while Tianjin ethylene refining & chemical integration project, Zhenhai megatonethylene project and Fujian ethylene project are progressing as scheduled. Thecapital expenditure of the Marketing & Distribution Segment was RMB 7.948billion. We have achieved preliminary results in erecting and acquiring petrolstations in key areas such as highways, and the number of newly erected oracquired petrol stations reached 547. We have also further improved ourmarketing and distribution network. Capital expenditure of headquarters andothers was RMB 1.770 billion . 3 Significant events 3.1 Significant changes and explanations of key accounting items and financialindex of the Company Items At 30 September At 31 December Increase/(decrease) Main reason for Changes 2007 2006 Amount Per centage RMB millions RMB millions RMB (%) millionsTrade accounts 23,438 15,910 7,528 47 Mainly due to operation expansion of thereceivable Company and increase of sales income.Advance payments 12,527 5,245 7,282 139 Mainly due to the rise of raw material prices of the Company.Construction in 84,241 52,724 31,517 60 Mainly due to the implementation ofprogress projects under the Yearly Investment Plan r of the Company.Intangible assets 12,674 9,132 3,542 39 Mainly due to increase of land tenure during the period.Short-term 2,000 11,885 (9,885) (83) Mainly due to the payment of RMB 10debentures payable billion short-term financing bond.Trade accounts 74,045 52,331 21,714 41 Mainly due to the rise of crude oil pricepayable and increase of processing quantity of the Company.Debentures payable 21,207 3,500 17,707 506 Mainly due to the issue of HKD 11.7 billion convertible bonds and RMB 5 billion corporate securities.Other non-current 1,564 1,146 418 36 Mainly due to the increase of long-termliabilities account payable. Items As at 30 September Increase/(decrease) Main reason for Changes Year 2007 Year 2006 Amount Per centage RMB RMB RMB millions (%) millions millionsExploration expenses 8,087 4,888 3,199 65 Mainly due to enhanced exploration for southern marine facies including Northeast and West Sichuan Province and reinforced prospective research.Impairment losses 1,593 135 1,458 1,080 Mainly due to devalue of long-term assets of the Company and year-on-year asset disposal increase.Investment income 4,117 2,331 1,786 77 Due to performance improving of joint corporation and affiliated companies, investment income of the Company increased year on year.Non-operating income 302 186 116 62 Mainly due to income from year-on-year increase of asset disposal of the Company.Income tax 22,114 15,256 6,858 45 Mainly due to profit increase of the Company, expenses for income tax increased year on year.Minority interests 1,790 258 1,532 594 Mainly due to profit increase of partly owned subsidiary of the Company.Net profits 48,683 33,889 14,794 44 Mainly due to the fact that the Company activelyattributable to the expanded business scale, increased market share,equity shareholders steadily promoted product sales, and remarkablyof the Company improved business performance by grasping the opportunities arising from the continuous high level of price of crude oil in international market and domestic petrochemical products.Net cash flow from 102,277 47,973 54,304 113 Mainly due to the increase of business profitsoperating activities and cash flow which occurred from business receivables and payables. 3.2 Significant events and their impacts as well as the analysis andexplanations for the solutions ( X )Applicable ( ) Inapplicable 3.2.1 Mr. Su Shulin elected Chairman of Sinopec Corp.'s Board of Directors On Sinopec Corp.'s second interim shareholders' general meeting dated 10 August 2007, Mr. Su Shulin was electeddirector of the third term of Board of Directors. On the same day, Mr. Su Shulin was elected Chairman of the Board onthe 13th meeting of the third term of Board of Directors. 3.2.2 2007 Interim distribution of dividends Pursuant to the "Articles of Association" of the Company and approved by the third term of Board of Directorson its 14th meeting, the dividends for the first half of 2007, up to 30 June 2007, were to be distributed in cash.Calculated on the basis of 86,702,439,000 shares as of 30 June 2007, the dividends were approximately RMB 4.335 billionin total, and RMB 0.05 yuan (tax-included) per share. The dividends for the first half of 2007 were distributed on 28September 2007, to the shareholders, whose names appear on the "Sinopec Corp.'s register of shareholders" asof 18 September 2007. 3.2.3 Issuance of convertible corporate bonds with detachable warrants On 27 September 2007, the 15th meeting of the third term of Board of Directors of SINOPEC reviewed and approved theproposal to issue convertible corporate bonds with detachable warrants and to issue corporate bond of 2007Sichuan-to-East China Gas Transport Project. Total amount of convertible corporate bonds with detachable warrants are not to exceed RMB 30 billion; target buyersare institutional investors and public investors who have opened RMB A share account at the Shanghai SecuritiesExchange (except for those forbidden by national laws & regulations to invest). Funds raised by bonds are to be used inthe Sichuan-to-East China Gas Transport Project, Tianjin 1 million tonnes/year ethylene project, Zhenhai 1 milliontonnes/year ethylene project and loan payments; Funds raised by detachable warrant are to be used in Tianjin 1 milliontonnes/year ethylene project, Zhenhai 1 million tonnes/year ethylene project, Wuhan ethylene project and so on as wellas supplementing cash flow and repayment of loans. Proposal to issue convertible corporate bonds with detachablewarrants will be submitted to the 2007 third interim shareholders' general meeting to be held on 15 November 2007 forapproval. 3.2.4 Issuance corporate bonds of the Sichuan-to-East China Gas Transport Project On 27 September 2007, the 15th meeting of the third term of Board of Directors of SINOPEC CORP. reviewed and approvedthe proposal to issue corporate bond of 2007 Sichuan-to-East China Gas Transport Project. On 22 January 2007, the firstSINOPEC interim shareholders' general meeting in 2007 approved the proposal to issue domestic corporate bonds andauthorized the Board to proceed with the issuance. Total amount of domestic corporate bonds are not to exceed RMB 20 billion. Target buyers are domestic qualifiedinstitutional investor (unless otherwise specified by national laws & regulations). All funds raised will be used inthe Sichuan-to-East China Gas Transport Project. 3.3 Status of commitment issue fulfillment by the Company, shareholder andactual controller. ( ) Applicable ( X ) Inapplicable 3.4 Caution and explanation as to the anticipated loss of accumulated netprofits from the beginning of the year to the end of the next reporting periodor significant changes over the same period of last year. ( ) Applicable ( X ) Inapplicable 3.5 Other significant events needed to be explained 3.5.1 Ownership of stocks of other listed company ( X ) Applicable ( ) Inapplicable Serial Stock code Shorted form Stocks held Shareholding Initial investment Accounting items number percentage cost (RMB yuan) 1 384 China Gas 210 million 10.61% HKD 128 million Long-term stock Holdings investment 3.5.2 Ownership of stocks of non-listed financial enterprises and companiesgoing public ( ) Applicable ( X ) Inapplicable 3.6 This quarterly report is published in both English and Chinese languages.The Chinese version shall prevail, in case of any disparity in construing thesetwo versions. By Order of the Board of Directors China Petroleum & Chemical Corporation Chen Ge Secretary to the Board of Directors Beijing, the PRC 29 October 2007 As at the date of this Announcement, the directors of Sinopec Corp are Messrs.Su Shulin*, Zhou Yuan*, Wang Tianpu#, Zhang Jianhua#, Wang Zhigang#, DaiHouliang#, Fan Yifei*, Yao Zhongmin*, Shi Wanpeng+, Liu Zhongli+ and Li Deshui+. # Executive Directors * Non-executive Directors + Independent Non-executive Directors This information is provided by RNS The company news service from the London Stock Exchange