Sinopec Corp. Announces 2009 Annual Results

BEIJING, March 28 /PRNewswire-FirstCall/ -- China Petroleum & Chemical Corporation ("Sinopec Corp." or "the Company") (CH: 600028; HKEX: 386; NYSE: SNP; LSE: SNP) today announced its annual results for year ended 31 December, 2009.

Financial Highlights:

• In accordance with the PRC Accounting Standards for Business Enterprises ("ASBE"), the Company's operating income was RMB 1,345.05 billion, down 6.9% from the same period in 2008. Net profit attributable to equity holders of the company was RMB 61.26 billion, representing an increase of 109.0% over the same period of last year. Basic earnings per share was RMB 0.707, up 115.5% year-on-year.

• In accordance with the International Financial Reporting Standards (IFRS), the Company's turnover, other operating revenues and other income amounted to RMB 1,345.05 billion, representing a decrease of 10.0% over the same period in 2008.  Net profit attributable to equity holders of the Company was RMB 61.76 billion, up 116.5% over last year. Basic earnings per share was RMB 0.712, up 116.4% year-on-year.

• The Board of Directors recommended a final dividend of RMB 0.11 per share, thus total dividend for the year reached 0.18 per share.

• The Company's total capital expenditure for the year was RMB110 billion.

Mr. Su Shulin, Chairman of Sinopec, commented: "In 2009, the global financial crisis and intense market competition posed severe challenges to the Company's production and operations. In particular, the beginning of the year witnessed plummeting price and demand for petroleum and petrochemical products, and a harsh contraction in E&P segment profits, while the refining, petrochemical and marketing businesses were faced with high inventories. Despite the challenges, the Company achieved impressive results by taking a series of proactive measures including vigorous efforts to develop new markets, targeted management for refinement on details, as well as structural adjustments."

"The E&P business maintained crude output volume with reduced costs and expenses while the price of crude remained sluggish. It increased exploration input and reserve traps, and also invested resources in technological research and development for tertiary oil recovery from challenging reserves. As the international crude price gradually recovered, the E&P segment realized sound returns which enhanced the sustainability of its business. Fully leveraging its capability to accommodate various crude feeds, the refineries maximized refining throughput by running at almost full capacity ever since the second quarter of 2009. In the meantime, the refining segment introduced business process optimization initiatives across several functions, from crude procurement and resource allocation, to inventory and logistics management, and product mix adjustment, thus generating better profits. In the chemicals business, the Company made more efforts to expand the market, and enhanced the integration of R&D throughout the production plan. It also continued to improve customer service and strengthened strategic alliances with key customers. Despite the unfavorable market environment, the majority of chemical plants operated at full capacity since March 2009, delivering excellent performance. Capitalizing on the well-established marketing network, logistics systems and strong brand, the Company's marketing business successfully expanded its operational scale in an oversupplied domestic market by adopting innovative marketing approaches, flexible promotional programs and customer-oriented after-sales services. In addition, the non-fuel business grew significantly, driving up non-fuel business revenue and realized good operational results."

"Over the course of the past year, China's macro economy gradually recovered, and a fuel pricing policy paired with tax and fee reform were implemented in the domestic market. The Company's four business segments all achieved satisfactory operating performance, resulting from our effective counter-measures to the economic crisis, as well as from advantages gained from our integrated upstream, midstream and downstream business model. The Company's asset structure and quality have been enhanced, net assets increased by 14.6% compared to that at the end of 2008. In 2009, the Company was successful in fulfilling its role as a corporate citizen paying tax to government at central and local level with a total of RMB 179.05 billion."  

PRINCIPAL FINANCIAL DATA AND INDICATORS

FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH THE PRC ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES ("ASBE")

    
    
    Items                                      For the years ended 31 December
    --------------------------------------------------------------------------
                             2009           2008      Change              2007
                     RMB millions   RMB millions          (%)     RMB millions
    --------------------------------------------------------------------------
    Operating income
                        1,345,052      1,444,291        (6.9)        1,200,997
    Operating profit/
     (loss)                80,202        (28,766)          -            78,083
    Profit before taxation 80,076         22,025       263.6            82,817
    Net profit attributable
     to equity shareholders
     of the Company        61,290         28,445       115.5            55,896
    Net profit attributable
     to equity shareholders
     of the Company before
     extraordinary gain
     and loss              61,258         29,307       109.0            56,438
    Net cash flow from
     operating activities 158,796         74,268       113.8           123,629
    --------------------------------------------------------------------------
    
    
    Items                                                       At 31 December
    --------------------------------------------------------------------------
                             2009           2008      Change              2007
                     RMB millions   RMB millions          (%)     RMB millions
    
    Total assets          866,475        763,297        13.5          740,358
    --------------------------------------------------------------------------
    Shareholders' equity
     attributable to equity
     shareholders of the
     Company              377,182        329,300        14.5          308,509
    --------------------------------------------------------------------------
    
    
    Items                                      For the years ended 31 December
    --------------------------------------------------------------------------
                             2009           2008      Change              2007
                     RMB millions   RMB millions          (%)     RMB millions
    --------------------------------------------------------------------------
    Basic earnings per
     share                 0.707           0.328       115.5             0.645
    Diluted earnings
     per share             0.702           0.288       143.8             0.645
    Basic earnings per
     share (before
     extraordinary gain
     and loss)             0.707           0.338       109.0             0.651
    Fully diluted
     return on net
     assets (%)            16.25            8.64        7.61             18.12
                                                  percentage
                                                      points
    Weighted average
     return on net
     assets (%)            17.25            8.86       8.39              19.37
                                                 percentage
                                                     points
    Fully diluted
     return (before
     extraordinary
     gain and loss) on
     net assets (%)        16.24            8.90        7.34             18.29
                                                  percentage
                                                      points
    Weighted average
     return (before
     extraordinary
     gain and loss) on
     net assets (%)        17.24            9.13        8.11             19.56
                                                  percentage
                                                      points
    Net cash flow
     from operating
     activities per share  1.832           0.857       113.8             1.426
    --------------------------------------------------------------------------

FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS")

    
    
                                                           Unit: RMB Millions
    
    Items                                     For the years ended 31 December
                          2009       2008        2007        2006        2005
    -------------------------------------------------------------------------
    Turnover, other operating 
     revenues and
     other income    1,345,052  1,495,148   1,205,860   1,061,588     824,005
    Operating income    84,431     26,336      85,496      81,250      71,517
    Profit before
     Taxation           80,568     22,116     82,847       79,073      68,090
    Profit attributable to
     equity shareholders
     of the Company     61,760     28,525     55,914       53,773      43,743
    Basic earnings per
     share (RMB)         0.712      0.329      0.645        0.620       0.505
    Diluted earnings per
     share (RMB)         0.708      0.289      0.645        0.620       0.505
    Return on capital
     employed (%)        11.13       5.15      11.66        12.58       12.50
    Return on net 
     assets (%)          16.44       8.70      18.16        20.30       19.31
    Net cash generated from
     operating activities
     per share (RMB)     1.754      0.767      1.368        1.060       0.903
    -------------------------------------------------------------------------

    
    
                                                           Unit: RMB millions
    
    Items                                      For the years ended 31 December
    --------------------------------------------------------------------------
                                  2009       2008      2007      2006    2005
    --------------------------------------------------------------------------
    Non-current assets         676,562    613,774   556,610   471,413  400,160
    Net current liabilities    112,139    121,258    88,772    76,364   32,285
    Non-current liabilities    165,570    143,974   134,616   107,815  110,195
    Non-controlling interests   23,192     20,653    25,325    22,323   31,174
    Total equity attributable
     to equity shareholders of
     the Company               375,661    327,889   307,897   264,911  226,506
    Net assets per share (RMB)   4.333      3.782     3.551     3.055    2.612
    Adjusted net assets per
     share (RMB)                 4.254      3.690     3.471     2.982    2.552
    Debt/equity ratio*(%)        27.96      27.94     28.10     27.53    31.34
    --------------------------------------------------------------------------
    
    * Debt/equity ratio = long-term loans/(total equity attributable to
     equity shareholders of the Company+ long-term loans) x 100%

The following table sets forth the operating revenues, operating expenses and operating profit by each segment before elimination of the intersegment transactions for the periods indicated, and the changes from 2008 to 2009.

    
    
                                    Years ended 31 December            Change
                                    -----------------------            ------
                                    2009               2008               (%)
    --------------------------------------------------------------------------
                                               RMB millions
    --------------------------------------------------------------------------
    Exploration and Production Segment
    ----------------------------------
    Operating revenues           123,835            196,501             (37.0)
    Operating expenses           104,191            129,932             (19.8)
    Operating profit              19,644             66,569             (70.5)
    
    Refining Segment
    ----------------------------------
    Operating revenues           703,571            870,703             (19.2)
    Operating expenses           680,494            934,338             (27.2)
    Operating profit              23,077            (63,635)                -
    
    Marketing and Distribution Segment
    ----------------------------------
    Operating revenues           783,091            816,763              (4.1)
    Operating expenses           752,791            778,244              (3.3)
    Operating profit              30,300             38,519             (21.3)
    
    Chemicals Segment
    ----------------------------------
    Operating revenues           218,457            253,456             (13.8)
    Operating expenses           204,842            266,406             (23.1)
    Operating profit              13,615            (12,950)                -
    
    Corporate and others
    ----------------------------------
    Operating revenues           521,869            716,484             (27.2)
    Operating expenses           524,074            718,651             (27.1)
    Operating profit              (2,205)            (2,167)              1.8
    --------------------------------------------------------------------------

MARKET CONDITION

In early part of 2009, Chinese economy was seriously affected by the deep recession caused by the global financial crisis. The Chinese government implemented a stimulus package to promote the economic growth and carried out proactive fiscal policy and moderately easy monetary policy, thereby giving an impetus to the growth of Chinese economy and maintaining a GDP growth of 8.7%. The Company's business environment underwent significant and profound changes in 2009. At the beginning of the year, petroleum and petrochemical products witnessed a sharp drop in market demand and price on a year-on-year basis. However, the market demand gradually recovered and the price went up accordingly after the first quarter. The international crude oil price