China Petroleum & Chemical Corporation ("Sinopec Corp." or the "Company") (HKEX: 386; SSE: 600028; NYSE: SNP) today announced its annual results for the twelve months ended 31 December 2016.

Financial Highlights

  • In accordance with IFRS, the Company's total turnover and other operating revenue was RMB 1.93 trillion. Its operating profit was RMB 77.2 billion, representing an increase of 35.9% from the previous year. Profit attributable to shareholders of the Company was RMB 46.7 billion, up by 43.6% year-on-year. Basic earnings per share were RMB 0.385.
  • In accordance with ASBE, the Company's operating profit was RMB 78.9 billion, representing a 51.0% increase as compared with 2015. Profit attributable to shareholders of the Company was RMB 46.4 billion, up 43.8% year-on-year. Basic earnings per share were RMB 0.383.
  • In the face of the challenges from low oil prices, the Company's fully utilized its integrated business model and achieved strong profit growth of downstream operations. Robust growth in refining profit and steady growth in the profit of marketing and chemicals segments enabled the Company to withstand the impacts of low oil prices. Operating profit of the refining segment surged by 168.5% year-on-year to the record high of RMB 56.3 billion. This segment became a key driver of the Company's profit growth.
  • In accordance with IFRS, the Company's liability-to-asset ratio as at the end of 2016 was 44.5%, which represented a decrease of 0.9 percentage points compared with the end of the previous year and was the lowest annual figure since its listing. Meanwhile, the Company maintained a sound financial position. It possessed abundant cash flow, with its cash and cash equivalents amounted to RMB124.5 billion as at 31 December 2016.
  • The Board of Directors proposed a final dividend of RMB 0.17 per share. Together with the interim dividend of RMB 0.079 per share, the total annual cash dividend for 2016 is RMB 0.249 per share. Its dividend payout ratio trended upwards and increased to 64.6% in 2016. Total cash dividend to be paid for the full year was RMB 30.1 billion, the highest since its listing.
  • Based on preliminary calculations by the financial department of the Company and in accordance with the ASBE, it is estimated that the net profit attributable to shareholders of the Company for the first quarter of 2017 will increase by approximately 150% year-on-year. The main reasons for the increase in estimated results include: the price of international crude oil increased significantly, which helped the upstream segment to reduce its losses as compared with the corresponding period last year; market demand for middle and downstream products remained stable, and profitability increased as compared with the corresponding period of last year.

Business Highlights

In 2016, global economic recovery remained weak. Meanwhile, China's economy maintained stable growth, with its gross domestic product (GDP) grew by 6.7%. As international oil prices hovered at low levels and trended upwards, domestic oil products supply remained abundant, leading to fierce competition in the market. Demand for chemicals grew steadily while China's environmental regulations became more stringent. The Company proactively addressed the changing market by focusing on improving its product quality, operating efficiency and business upgrade. It accelerated the business restructuring and pressed ahead with measures to address market development, optimisation, cost reduction and risk control, coordinating all aspects of its work. As a result, the Company delivered o better-than-expected operating results.

  • Exploration and Production segment: In the face of low oil prices and harsh conditions in the upstream sector, the Company stepped up efforts to rein in costs and address its weaknesses. At the same time, it gave priority to high-efficiency exploration activities and sustained exploration efforts. As to resources development, it adopted a profit-oriented approach and adjusted the development structure. While enhancing cost discipline, it cut low-efficiency oil production and high-cost EOR operations. The Company carried out the development of the Phase Two of Fuling Shale Gas project to increase its natural gas production.
  • Refining segment: The Company further upgraded oil products quality as scheduled. Through superior feedstock optimization by its international trading business, it further cut crude procurement costs and achieved moderate increase in product exports. It brought centralized marketing advantages into full play to further improve the margins for LPG, asphalt and other products.
  • Marketing and Distribution segment: The Company leveraged its advantages of integrated business model and distribution network to achieve solid operating results. It made timely adjustments to its marketing strategies, improved its marketing network and promoted effective supply. Its non-fuel business maintained rapid growth with scale increased and margins strengthened.
  • Chemicals segment: The Company strengthened the operations of its manufacturing facilities, fine-tuned chemical feedstock mix to lower costs, maximised production of high value-added products customized to meet market demands, and enhanced its research and development, production, marketing and sales of high value-added new products. As a result, satisfactory results were made.

Mr. Wang Yupu, Chairman of Sinopec Corp. said, "Over the past year, we focused on the transformation of our growth mode and structural adjustments, which enabled us to improve the quality and efficiency of our assets as well as to upgrade our operations. Under the management's leadership, the entire staff worked together to advance these goals. We achieved significant improvement in our operating results through relentless joint efforts to explore new markets, optimise our operations, reduce costs and improve risk management. All these achievements marked a good start to our 13th Five-Year Plan. In our efforts to implement supply-side structural reform, the Company benefited from an integrated value chain, which allowed our businesses to complement each other. As we increased the effective supply of petroleum and petrochemical products and related services to the community, we reaped economic benefits and improved our asset utilisation. Looking ahead into 2017, the Company will adhere to the development strategies of value-oriented growth, innovation-driven development, integrated resource allocation, openness to cooperation, and green low-carbon development. In accordance with our objective of progressing at a steady pace, we will drive upgrades in our businesses and drive new breakthroughs."