SNP [CHINA PETROLEUM & CHEMICAL] 6-K: This Form 6-K consists of: (a joint stock

Ticker: SNP, Company: CHINA PETROLEUM & CHEMICAL CORP, Type: 6-K, Date: 2019-10-31
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Webplus: SNP/20191031/6-K/1/000.htm SEC Original: form6-k.htm
This Form 6-K consists of: (a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 00386) China Petroleum & Chemical Corporation The Third Quarterly Report for 2019 By Order of the Board China Petroleum & Chemical Corporation Huang Wensheng Vice President and Secretary to the Board of Directors Beijing, the PRC, 30 October












This Form 6-K consists of:

An announcement regarding 2019 third quarterly report of China Petroleum & Chemical Corporation (the “Registrant”), made by the Registrant on October 30, 2019.





Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibilities for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)
(Stock Code: 00386)

Overseas Regulatory Announcement
China Petroleum & Chemical Corporation
The Third Quarterly Report for 2019

This announcement is made pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

 
By Order of the Board
 
China Petroleum & Chemical Corporation
 
Huang Wensheng
 
Vice President and Secretary to the Board of Directors

Beijing, the PRC,
30 October 2019

As of the date of this announcement, Directors of Sinopec Corp. are: Dai Houliang*, Ma Yongsheng#, Li Yunpeng*,Yu Baocai*, Ling Yiqun#, Liu Zhongyun#, Li Yong*, Tang Min+, Fan Gang+, Cai Hongbin+, Ng, Kar Ling Johnny+.

# Executive Director
* Non-executive Director
+ Independent Non-executive Director




China Petroleum & Chemical Corporation

The Third Quarterly Report for 2019


















30 October 2019

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 third quarterly report for 2019 was approved at the 8th meeting of the Seventh Session of the Board of Directors of Sinopec Corp. All directors attended this meeting.

1.3
Mr. Dai Houliang, Chairman, Mr. Ma Yongsheng, President, Mr. Wang Dehua, Chief Financial Officer and Head of the Corporate Accounting 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 30 September 2019
As of 31 December 2018
Changes from the end of the preceding year to the end of the reporting period (%)
Total assets
1,826,336
1,592,308
14.7
Total equity attributable to equity shareholders of the Company
725,893
718,355
1.1

RMB million
Items
Nine-month period ended 30 September
Changes over the same period of the preceding year (%)
2019
2018
Net cash flow from operating activities
81,398
137,919
(41.0)
 
Operating income
2,233,305
2,072,970
7.7
Net profit attributable to equity shareholders of the Company
43,281
59,980
(27.8)
Net profit attributable to equity shareholders of the Company excluding extraordinary gains and losses
41,546
57,150
(27.3)
Weighted average return on net assets (%)
5.93
8.28
(2.35) percentage points
Basic earnings per share (RMB)
0.357
0.495
(27.8)
Diluted earnings per share (RMB)
0.357
0.495
(27.8)

RMB million
Extraordinary items
Third Quarter 2019
RMB million
Nine Months 2019
RMB million
Net loss/(gain) on disposal of non-current assets
(5)
169
Donations
63
79
Government grants
(1,244)
(3,152)
Gains on holding and disposal of various investments
(144)
(169)
Other extraordinary income and expenses, net
221
608
Subtotal
(1,109)
(2,465)
Tax effect
208
625
Total
(901)
(1,840)
Equity shareholders of the Company
(848)
(1,735)
Minority interests
(53)
(105)

2.1.2
Principal financial data and indicators prepared in accordance with International Financial



Reporting Standards (IFRS)
RMB million
Items
As of 30 September
 2019
As of 31 December
 2018
Changes from the end of the preceding year to the end of the reporting period (%)
Total assets
1,826,336
1,592,308
14.7
Total equity attributable to shareholders of the Company
724,863
717,284
1.1

RMB million
Items
Nine-month period ended 30 September
Changes over the same period of the preceding year (%)
2019
2018
Net cash generated from operating activities
81,398
137,919
(41.0)
 
Operating profit
68,340
 85,865
(20.4)
Net profit attributable to shareholders of the Company
44,226
 60,155
(26.5)
Basic earnings per share (RMB)
0.365
0.497
(26.5)
Diluted earnings per share (RMB)
0.365
0.497
(26.5)
Return on net assets (%)
6.10
8.34
(2.24) percentage points





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 502,791, including 496,981 holders of domestic A shares and 5,810 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
25,387,693,005
20.97
Unknown
H share
中国证券金融股份有限公司
2,609,312,057
2.16
0
A share
国新投资有限公司
1,252,427,354
1.03
0
A share
北京诚通金控投资有限公司
1,038,657,802
0.86
0
A share
香港中央结算有限公司
571,203,332
0.47
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
中国人寿保险股份有限公司-传统-普通保险产品-005LCT001
261,330,179
0.22
0
A share
中国人寿保险股份有限公司-分红-个人分红-005LFH002
220,571,695
0.18
0
A share
国泰君安证券股份有限公司
114,766,313
0.09
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-传统-普通保险产品-005LCT001 and 中国人寿保险股份有限公司-分红-个人分红-005LFH002 which were both administrated by 中国人寿保险股份有限公司 relationship or acting in concert among or between the above-mentioned shareholders.




2.3
Review of operating results

In the first three quarters of 2019, growth of the global economy slowed down, while China’s economy maintained stable growth with GDP up by 6.2% year on year. International crude oil prices fluctuated with an upward trend first, and then slid gradually. Prices for domestic refined oil products were adjusted timely with the international crude oil prices. The domestic demand for natural gas kept a high growth rate, up by 9.8% year on year. While the domestic demand for refined oil products maintained steady growth, the market witnessed strong competition with abundant supply. The domestic demand for major chemicals kept fairly rapid growth.

The Company stays committed to the overall guidelines of seeking steady progress, pursues new concepts of development, and follows specialised development, market-oriented operation, internationalisation and overall coordination to fully optimise operations, expand markets, reduce costs, control risks and realize growth, and promotes all aspects of work in an integrated manner.

In accordance with CASs, net profit attributable to equity shareholders of the Company was RMB 43.281 billion, down by 27.8% compared with the same period of last year. In accordance with IFRS, net profit attributable to equity shareholders of the Company was RMB 44.226 billion, down by 26.5% compared with the same period of last year.

Exploration and Production: The Company fully implemented the action plan of making greater efforts in oil and gas exploration and production. Good results were obtained through efforts in maintaining oil production, increasing gas output and reducing cost. In exploration, we reinforced preliminary exploration in new areas and strengthened integrated detailed evaluation in mature fields, which led to new oil and gas discoveries in Jiyang Depression, Sichuan Basin and Ordos Basin, etc. In development, we strengthened the capacity building of profitable oil production. The Company constantly pushed forward capacity buildings in Fuling, Weirong, West Sichuan and Dongsheng gas fields. We accelerated an integrated system of natural gas production, supply, storage and marketing and promoted a coordinated growth along the value chain. In the first three quarters, oil and gas production of the Company was 341.74 million barrels of oil equivalent, increased by 1.9%, of which domestic crude oil production kept stable, while natural gas grew by 8.4%. The Exploration and Production Segment realised an operating profit of RMB 8.718 billion, representing an increase of RMB 9.799 billion compared with the same period of last year.

Exploration and Production
Unit
Nine-month period ended 30 September
Changes
2019
2018
(%)
Oil and gas production
million boe
341.74
335.34
1.9
Crude oil production
million barrels
212.78
216.32
(1.6)
China
million barrels
186.69
186.50
0.1
Overseas
million barrels
26.09
29.82
(12.5)
Natural gas production
billion cubic feet
773.41
713.78
8.4
Realised crude oil price
USD/barrel
58.82
65.12
(9.7)
Realised natural gas price
USD/thousand cubic feet
6.19
5.91
4.7
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: With the market-oriented approach, we brought the advantage of integrated operations into full play, and continued to optimise product mix. We moderately increased the export of refined oil products and expanded the market of kerosene to keep a relatively high utilisation rate. New projects and structural adjustment projects were implemented in an orderly manner. We implemented and constantly optimised the quality upgrading plan for new spec bunker fuel to lower the production cost and prepare for market supply. In the first three quarters, refinery throughput increased by 1.9% compared with the same period of last year. Production of refined oil products increased by 2.9%, among which gasoline up by 3.2%, kerosene up by 7.2% compared with the same period of last year. The Refining Segment realised an operating profit of RMB 22.50 billion.

Refining
Unit
Nine-month period ended 30 September
Changes
(%)
2019
2018
Refinery throughput
million tonnes
186.26
182.74
1.9
Gasoline, diesel and kerosene production
million tonnes
119.54
116.13
2.9
Gasoline
million tonnes
47.20
45.74
3.2
Diesel
million tonnes
49.01
48.62
0.8
Kerosene
million tonnes
23.33
21.77
7.2
Light chemical feedstock production
million tonnes
30.05
29.01
3.6
Light product yield
%
76.44
76.11
0.33
percentage points
Refining yield
%
94.99
94.98
0.01
percentage points
Note : Including 100% production of domestic joint ventures.
Marketing and Distribution: Adhering to the strategy of balancing volume and profit under strong market competition, the Company optimised resources allocation, expanded market, and increased operational profits. We brought our advantages of integrated business and distribution network into full play and expanded total sales volume and retail scale. We further improved our marketing network layout and reinforced existing advantages. We continuously explored overseas market in refined oil products, and expanded the scale of international trade. We accelerated the development and marketing of self-owned brand products and advanced the growth of non-fuel business. In the first three quarters, total sales volume of refined oil products was 192.42 million tonnes, increased by 8.5%, of which total domestic sales volume of refined oil products increased by 3.1%, and retail sales volume increased by 1.1%. The Marketing and Distribution Segment realised an operating profit of RMB 23.245 billion. For the third quarter ended 30 September, it realised an operating profit of RMB 8.536 billion, up by 24.7% on a quarter-on-quarter basis.

Marketing and Distribution
Unit
Nine-month period ended 30 September
Changes
(%)
2019
2018
Total sales volume of refined oil products
million tonnes
192.42
177.35
8.5
Total domestic sales volume of refined oil products
million tonnes
139.25
135.02
3.1
Retail
million tonnes
91.80
90.82
1.1
Direct sales & Distribution
million tonnes
47.45
44.20
7.4
Annualised average throughput per station
tonnes/station
3,991
3,953
1.0
Note: The total sales volume of refined oil products includes the amount of trading volume.




 
As of 30 September
2019
As of 31 December
2018
Changes from the end of last year to the end of the reporting period (%)
Total number of Sinopec-branded service stations
30,676
30,661
0.05
Number of company-operated stations
30,670
30,655
0.05
Number of convenience stores
27,343
27,259
0.31

Chemicals: The Company adhered to the development philosophy of “basic plus high-end” and improved effective supply. We constantly fine-tuned chemical feedstock mix to further lower costs. We improved the coordination among production, marketing, research and application to raise the proportion of high-end products. The ratio of new and specialty products of synthetic resin reached 64.7%, the ratio of high-value-added products of synthetic rubber reaching 28.4%, and differential ratio of synthetic fibre reaching 90.1%. We enhanced the dynamic optimisation of plants and product chains, and improved the utilisation and production plan. We actively promoted major projects and accelerated the construction of advanced production capacity. Meanwhile, we further expanded the market and promoted targeted marketing and service. In the first three quarters, ethylene production reached 9.295 million tonnes, up by 5.8% and chemical sales volume was 71.54 million tonnes, up by 10.1% compared with the same period of last year. The Chemicals Segment realised an operating profit of RMB 16.560 billion.

Chemicals
Unit
Nine-month period ended 30 September
Changes
(%)
2019
2018
Ethylene
thousand tonnes
9,295
8,784
5.8
Synthetic resin
thousand tonnes
12,749
12,171
4.7
Monomers and polymers for synthetic fibre
thousand tonnes
7,511
7,100
5.8
Synthetic fibre
thousand tonnes
968
940
3.0
Synthetic rubber
thousand tonnes
794
646
22.9
Note : Including 100% production of domestic joint ventures.

Capital expenditure: In the first three quarters, total capital expenditures were RMB 78.0 billion. Capital expenditures for the exploration and production segment were RMB 34.751 billion, mainly for shale gas capacity building in Fuling and Weirong, natural gas capacity building in Hangjinqi, crude oil capacity building in Shengli and Northwest oilfields, natural gas pipeline and storage as well as overseas projects. Capital expenditures for the refining segment were RMB 19.276 billion, mainly for the Zhongke integrated refining and chemical project, product mix optimisation of Zhenhai, Tianjin, Maoming and Luoyang. Capital expenditures for the marketing and distribution segment were RMB 14.818 billion, mainly for constructing service stations, logistics facilities, non-fuel business and revamping of underground oil tanks. Capital expenditures for the chemicals segment were RMB 8.648 billion, mainly for ethylene projects in Zhongke, Zhenhai and Wuhan, Phase II of Hainan high -efficiency and environmentally-friendly aromatics project. Capital expenditures for corporate and others were RMB 0.507 billion, mainly for R&D facilities and information technology application 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 30 September
 2019
As of 31 December
2018
Increase/(Decrease)
Main reasons for changes
Amount
Percentage
RMB million
RMB million
RMB million
%
Financial assets held for trading
10,443
25,732
(15,289)
(59.4)
Receipt of the structured deposits at maturity
Derivative financial assets
1,632
7,887
(6,255)
(79.3)
Decrease in loss position and increase in profitable position of derivative hedging financial instruments
Derivative financial liabilities
4,898
13,571
(8,673)
(63.9)
Bills receivable
12,220
7,886
4,334
55.0
Increase in sales volume
Accounts receivable
76,157
56,993
19,164
33.6
Prepayments
12,681
5,937
6,744
113.6
Increase in land bid security due to the enlargement of operation scale
Long-term deferred expenses
8,419
15,659
(7,240)
(46.2)
Decrease in long-term deferred expenses under New Leases Standard
Short-term loans
63,567
44,692
18,875
42.2
Increase in low-interest short-term loan
Bills payable
11,058
6,416
4,642
72.4
Increase in bills payable for main projects
Employee benefits payable
14,760
7,312
7,448
101.9
The increased base of social insurance, housing fund and enterprise annuity payment and the increase of employee income payable
Taxes payable
33,651
87,060
(53,409)
(61.3)
Due to the time difference of tax payment, part of the unpaid tax from the end of last year had been paid during this reporting period
Non-current liabilities due within one year
42,862
17,450
25,412
145.6
Corporate bond of RMB 9 billion issued in 2010 will be due in May 2020. Non-current liabilities will be due in 2020 under New Leases Standard
Specific reserve
2,786
1,706
1,080
63.3
The provision of safety production fund





Items of Consolidated Income Statement
Nine-month period ended 30 September
Increase/(Decrease)
Main reasons for changes
2019
2018
Amount
Percentage
RMB Million
RMB Million
RMB Million
%
Financial Expense
7,790
632
7,158
1132.6
Increase in Financial Expense under New Leases Standard
(Losses)/gains from changes in fair value
(1,426)
476
(1,902)
-
Increase in fair value loss on derivative financial instruments not qualified as hedging
Impairment losses
(91)
(728)
637
-
Decrease in Impairment loss during this reporting period

Items of consolidated cash flow statement
Nine-month period ended 30 September
Increase/(Decrease)
Main reasons for changes
2019
2018
Amount
Percentage
RMB
million
RMB
million
RMB million
%
Other cash received relating to operational activities
102,241
57,437
44,804
78.0
Decrease in Margin deposit in financial derivatives business
Other cash paid relating to operational activities
131,492
81,761
49,731
60.8
Increase in Margin deposit in financial derivatives business
Cash received from returns on investments
19,455
49,695
(30,240)
(60.9)
Decrease in recovered  value of structured deposits at maturity
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
433
8,490
(8,057)
(94.9)
Net cash received in 2018 was mainly due to  subsidiary companies relocation compensation
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
73,910
54,464
19,446
35.7
Investment cash outflow during this reporting period
Cash paid for acquisition of investments
14,296
10,551
3,745
35.5
Increase in value of structured deposits and investment in Gulei ethylene project
Net cash paid for the acquisition of subsidiaries and other business entities
-
3,188
(3,188)
-
Net cash paid for the acquisition of SECCO in 2018
Other cash paid relating to investing activities
78,561
55,593
22,968
41.3
Increase in the value of certificate of deposit over three months
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
 
Dai Houliang
 
30 October, 2019



4
Appendix
4.1
Quarterly financial statements prepared under China Accounting Standards for Business Enterprises (CASs)
Consolidated Balance Sheet
as at 30 September 2019
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
Items
At 30 September 2019
At 31 December 2018
Current assets:
   
Cash at bank and on hand
159,965
167,015
Financial assets held for trading
10,443
25,732
Derivative financial assets
1,632
7,887
Bills receivable
12,220
7,886
Accounts receivable
76,157
56,993
Prepayments
12,681
5,937
Other receivables
29,853
25,312
Inventories
208,740
184,584
Other current assets
23,349
22,774
Total current assets
535,040
504,120
Non-current assets:
   
Long-term equity investments
149,511
145,721
Other equity instrument investments
1,428
1,450
Fixed assets
599,755
617,812
Construction in progress
161,274
136,963
Right-of-use assets
200,333
-
Intangible assets
104,315
103,855
Goodwill
8,705
8,676
Long-term deferred expenses
8,419
15,659
Deferred tax assets
19,972
21,694
Other non-current assets
37,584
36,358
Total non-current assets
1,291,296
1,088,188
Total assets
1,826,336
1,592,308
Current liability:
   
Short-term loans
63,567
44,692
Derivative financial liabilties
4,898
13,571
Bills payable
11,058
6,416
Accounts payable
217,556
186,341
Contract liabilities
135,888
124,793
Employee benefits payable
14,760
7,312
Taxes payable
33,651
87,060
Other payables
73,644
77,463
Non-current liabilities due within one year
42,862
17,450
Total current liabilities
597,884
565,098




Non-current liabilities:
   
Long-term loans
71,119
61,576
Debentures payable
23,323
31,951
Lease liabilities
180,655
-
Provisions
44,894
42,800
Deferred tax liabilities
5,900
5,948
Other non-current liabilities
29,672
27,276
Total non-current liabilities
355,563
169,551
Total liabilities
953,447
734,649
Shareholders’ equity:
   
Share capital
121,071
121,071
Capital reserve
122,121
119,192
Other comprehensive income
(342)
(6,774)
Specific reserve
2,786
1,706
Surplus reserves
203,678
203,678
Retained earnings
276,579
279,482
Total equity attributable to shareholders of the Company
725,893
718,355
Minority interests
146,996
139,304
Total shareholders’ equity
872,889
857,659
Total liabilities and shareholders’ equity
1,826,336
1,592,308

 
Dai Houliang
Ma Yongsheng
Wang Dehua
Chairman
President
Chief Financial Officer







Balance Sheet
as at 30 September 2019
Prepared by: China Petroleum & Chemical Corporation
Units: million  Currency: RMB  Type: unaudited
Items
At 30 September 2019
At 31 December 2018
Current assets
   
Cash at bank and on hand
73,526
82,879
Financial assets held for trading
8,500
22,500
Bills receivable
355
156
Accounts receivable
23,928
29,989
Prepayments
3,552
2,488
Other receivables
67,986
57,432
Inventories
50,846
45,825
Other current assets
21,866
15,835
Total current assets
250,559
257,104
Non-current assets
 
 
Long-term equity investments
296,498
289,207
Other equity instrument investments
395
395
Fixed assets
281,776
302,082
Construction in progress
57,845
51,598
Right-of-use assets
113,875
-
Intangible assets
8,206
8,571
Long-term deferred expenses
2,473
2,480
Deferred tax assets
9,955
11,021
Other non-current assets
3,213
9,145
Total non-current assets
774,236
674,499
Total assets
1,024,795
931,603
Current liabilities
 
 
Short-term loans
30,579
3,961
Derivative financial liabilties
-
967
Bills payable
3,748
2,075
Accounts payable
78,287
82,343
Contract liabilities
5,590
4,230
Employee benefits payable
8,938
4,294
Taxes payable
21,419
54,764
Other payables
123,844
119,514
Non-current liabilities due within one year
33,698
16,729
Total current liabilities
306,103
288,877
Non-current liabilities
 
 
Long-term loans
45,228
48,104
Debentures payable
11,000
20,000
Lease liabilities
108,901
-
Provisions
34,418
33,094




Other non-current liabilities
4,842
4,332
Total non-current liabilities
204,389
105,530
Total liabilities
510,492
394,407
Shareholders’ equity
   
Share capital
121,071
121,071
Capital reserve
68,801
68,795
Other comprehensive income
482
(485)
Specific reserve
1,408
989
Surplus reserves
203,678
203,678
Retained earnings
118,863
143,148
Total shareholders’ equity
514,303
537,196
Total liabilities and shareholders’ equity
1,024,795
931,603

Dai Houliang
Ma Yongsheng
Wang Dehua
Chairman
President
Chief Financial Officer






Consolidated Income Statement
for the nine-month period ended 30 September 2019
Prepared by: China Petroleum & Chemical Corporation
Units: million   Currency: RMB   Type: unaudited
Items
Three-month period ended 30 September 2019
Three-month period ended 30 September 2018
Nine-month period ended 30 September 2019
Nine-month period ended 30 September 2018
I. Operating income
734,309
772,718
2,233,305
2,072,970
II. Total Operating costs
718,620
749,026
2,172,237
1,988,740
Including: Operating costs
617,990
645,961
1,881,083
1,696,680
Taxes and surcharges
61,685
64,824
181,931
183,545
Selling and distribution expenses
16,021
15,057
45,761
42,718
General and administrative expenses
16,079
18,817
43,118
52,725
Research and development costs
1,942
1,641
5,931
5,721
Financial expenses
2,627
369
7,790
632
Exploration expenses,
including dry holes
2,276
2,357
6,623
6,719
Add: Other income
1,074
1,628
2,674
3,477
Investment income
3,701
3,819
6,475
9,703
(Losses)/gains from
changes in fair value
(1,120)
926
(1,426)
476
Credit impairment losses
6
(14)
(7)
24
Impairment losses
(9)
(591)
(91)
(728)
Asset disposal gains/(losses)
5
(143)
(169)
75
III. Operating profit
19,346
29,317
68,524
97,257
Add: Non-operating income
366
270
1,051
900
Less: Non-operating expenses
476
752
1,243
1,455
IV. Profit before taxation
19,236
28,835
68,332
96,702
Less: Income tax expense
3,728
6,337
13,868
20,923
V. Net profit
15,508
22,498
54,464
75,779
Classification by going concern:
       
(i) Continuous operating net profit
15,508
22,498
54,464
75,779
(ii) Termination of net profit
-
-
-
-
Classification by ownership:
       
(i)Equity shareholders of the Company
11,943
18,380
43,281
59,980




(ii) Minority interests
3,565
4,118
11,183
15,799
VI. Other comprehensive income
1,663
3,619
6,231
3,877
Items that may not be reclassified subsequently to profit or loss:
(2)
3
(22)
(14)
Changes in fair value of other equity instrument investments
(2)
3
(22)
(14)
Items that may be reclassified subsequently to profit or loss:
1,665
3,616
6,253
3,891
Other comprehensive income that can be converted into profit or loss under the equity method
 (98)
 (172)
(607)
(285)
Cash flow hedges
 (248)
1,092
4,543
584
Foreign currency translation differences
2,011
2,696
2,317
3,592
VII. Total comprehensive income
17,171
26,117
60,695
79,656
Attributable to:
       
Equity shareholders of the Company
12,926
21,125
48,842
62,728
Minority interests
4,245
4,992
11,853
16,928
VIII. Earnings per share:
       
(i) Basic earnings per share
(RMB/Share)
0.099
0.151
0.357
0.495
(ii) Diluted earnings per share
(RMB/Share)
0.099
0.151
0.357
0.495






Income Statement
for the nine-month period ended 30 September 2019
Prepared by: China Petroleum & Chemical Corporation
Units: million   Currency: RMB   Type: unaudited
Items
Three-month period ended 30 September 2019
Three-month period ended 30 September 2018
Nine-month period ended 30 September 2019
Nine-month period ended 30 September 2018
I. Operating income
254,297
279,491
766,632
774,103
Less: Operating costs
201,259
220,145
605,829
589,706
Taxes and surcharges
41,484
43,702
123,434
126,747
Selling and distribution expenses
942
833
2,492
2,238
General and administrative expenses
7,151
9,269
18,318
26,079
Research and development costs
1,789
1,385
5,516
5,273
Financial expenses
1,947
322
5,860
1,711
Exploration expenses, including dry holes
2,138
2,232
6,159
6,405
Add: Other income
564
677
1,455
1,270
Investment income
5,599
7,925
16,404
17,786
Gains/(losses) from changes in fair value
-
-
20
(171)
Credit impairment losses
10
1
18
15
Impairment losses
(2)
(29)
(1)
(78)
Asset disposal gains/(losses)
6,963
(27)
6,984
225
II. Operating profit
10,721
10,150
23,904
34,991
Add: Non-operating income
86
94
197
239
Less: Non-operating expenses
258
412
535
701
III. Profit before taxation
10,549
9,832
23,566
34,529
Less: Income tax expense
1,163
438
1,673
4,520
IV. Net profit
9,386
9,394
21,893
30,009
(i) Continuous operating net profit
9,386
9,394
21,893
30,009
(ii) Termination of net profit
-
-
-
-
V. Other comprehensive income
113
14
899
14
Items that may be reclassified subsequently to profit or loss
113
14
899
14
Other comprehensive income that can be converted into profit or loss under the equity method
112
14
139
14
Cash flow hedges
1
-
760
-
VI. Total comprehensive income
9,499
9,408
22,792
30,023

Dai Houliang
Ma Yongsheng
Wang Dehua
Chairman
President
Chief Financial Officer




Consolidated Cash Flow Statement
for the nine-month period ended 30 September 2019
Prepared by: China Petroleum & Chemical Corporation
Units: million  Currency: RMB  Type: unaudited

Items
Nine-month period ended 30 September 2019
Nine-month period ended 30 September  2018
I. Cash flows from operating activities:
 
 
Cash received from sale of goods and rendering of services
2,366,716
2,310,756
Refund of taxes and levies
1,446
1,208
Other cash received relating to operating activities
102,241
57,437
Sub-total of cash inflows
2,470,403
2,369,401
Cash paid for goods and services
(1,925,742)
(1,810,925)
Cash paid to and for employees
(51,592)
(49,995)
Payments of taxes and levies
(280,179)
(288,801)
Other cash paid relating to operating activities
(131,492)
(81,761)
Sub-total of cash outflows
(2,389,005)
(2,231,482)
Net cash flow from operating activities
81,398
137,919
II. Cash flows from investing activities:
   
Cash received from disposal of investments
19,455
49,695
Cash received from returns on investments
8,173
7,338
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
433
8,490
Other cash received relating to investing activities
67,954
55,003
Sub-total of cash inflows
96,015
120,526
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
(73,910)
(54,464)
Cash paid for acquisition of investments
(14,296)
(10,551)
Net cash paid for the acquisition of subsidiaries and other business entities
-
(3,188)
Other cash paid relating to investing
activities
(78,561)
(55,593)
Sub-total of cash outflows
(166,767)
(123,796)
Net cash flow from investing activities
(70,752)
(3,270)
III. Cash flows from financing activities:
   
Cash received from capital contributions
2,222
874
Including: Cash received from minority shareholders’ capital contributions to subsidiaries
2,198
868




Cash received from borrowings
469,696
526,630
Other cash received relating to financing   activities
322
-
Sub-total of cash inflows
472,240
527,504
Cash repayments of borrowings
(441,579)
(517,451)
Cash paid for dividends, profits distribution or interest
(55,447)
(85,928)
Including: Subsidiaries’ cash payments for distribution of dividends or profits to minority shareholders
(4,659)
(15,783)
Other cash paid relating to financing activities
(9,245)
(23)
Sub-total of cash outflows
(506,271)
(603,402)
Net cash flow from financing activities
(34,031)
(75,898)
IV. Effects of changes in foreign exchange rate
313
315
V. Net (decrease)/increase in cash and cash equivalents
(23,072)
59,066
AddInitial balance of cash and cash equivalents
111,922
113,218
VI. Ending balance of cash and cash equivalents
88,850
172,284

Dai Houliang
Ma Yongsheng
Wang Dehua
Chairman
President
Chief Financial Officer






Cash Flow Statement
for the nine-month period ended 30 September 2019
Prepared by: China Petroleum & Chemical Corporation
Units: million  Currency: RMB  Type: unaudited
Items
Nine-month period ended 30 September 2019
Nine-month period ended 30 September 2018
I. Cash flows from operating activities:
   
Cash received from sale of goods and rendering of services
889,797
902,672
Refund of taxes and levies
947
768
Other cash received relating to operating activities
5,062
18,654
Sub-total of cash inflows
895,806
922,094
Cash paid for goods and services
(652,604)
(626,237)
Cash paid to and for employees
(26,693)
(27,990)
Payments of taxes and levies
(186,228)
(184,068)
Other cash paid relating to operating activities
(6,888)
(10,499)
Sub-total of cash outflows
(872,413)
(848,794)
Net cash flow from operating activities
23,393
73,300
II.Cash flows from investing activities:
   
Cash received from disposal of investments
16,650
57,769
Cash received from returns on investments
16,510
30,145
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
18
477
Other cash received relating to investing activities
22,382
20,175
Sub-total of cash inflows
55,560
108,566
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
(47,047)
(28,910)
Cash paid for acquisition of investments
(8,338)
(7,407)
Other cash paid relating to investing activities
(36,900)
(10,183)
Sub-total of cash outflows
(92,285)
(46,500)
Net cash flow from investing activities
(36,725)
62,066
III.Cash flows from financing activities:
   
Cash received from borrowings
91,665
98,500
Other cash received relating to financing activities
69,218
-
Sub-total of cash inflows
160,883
98,500
Cash repayments of borrowings
(67,587)
(126,626)
Cash paid for dividends or interest
(47,149)
(68,911)
Other cash paid relating to financing activities
(58,570)
-
Sub-total of cash outflows
(173,306)
(195,537)
Net cash flow from financing activities
(12,423)
(97,037)




IV. Net (decrease)/increase in cash and cash equivalents
(25,755)
38,329
AddInitial balance of cash and cash equivalents
59,120
72,309
V. Ending balance of cash and cash equivalents
33,365
110,638

Dai Houliang
Ma Yongsheng
Wang Dehua
Chairman
President
Chief Financial Officer





Segment Reporting
for the nine-month period ended 30 September 2019
Prepared by: China Petroleum & Chemical Corporation
Units: million  Currency: RMB  Type: unaudited
Items
Nine-month period ended 30 September 2019
Nine-month period ended 30 September 2018
Income from principal operations
   
Exploration and production
   
External sales
79,424
 62,271
Inter–segment sales
66,262
 71,033
Subtotal
145,686
 133,304
Refining
   
External sales
105,986
 109,029
Inter–segment sales
801,310
 820,020
Subtotal
907,296
 929,049
Marketing and distribution
   
External sales
1,030,178
 1,028,274
Inter–segment sales
2,719
 4,092
Subtotal
1,032,897
 1,032,366
Chemicals
   
External sales
327,637
 344,753
Inter–segment sales
42,508
 46,626
Subtotal
370,145
 391,379
Corporate and others
   
External sales
641,791
 480,879
Inter–segment sales
473,187
 458,916
Subtotal
1,114,978
 939,795
Elimination of inter–segment sales
(1,385,986)
 (1,400,687)
Consolidated income from principal operations
2,185,016
 2,025,206
Income from other operations
   
Exploration and production
6,722
 6,656
Refining
3,829
 3,774
Marketing and distribution
25,436
 24,944
Chemicals
10,912
 11,400
Corporate and others
1,390
990
Consolidated income from other operations
48,289
47,764




Consolidated operating income
2,233,305
2,072,970
Operating profit/(loss)
   
By segment
   
Exploration and production
7,295
(2,017)
Refining
21,445
53,675
Marketing and distribution
23,139
23,784
Chemicals
16,059
23,280
Corporate and others
1,066
(7,124)
Elimination
(244)
(7,440)
Total segment operating profit
68,760
84,158
Investment income
 
 
Exploration and production
2,398
2,066
Refining
(767)
604
Marketing and distribution
2,291
1,848
Chemicals
3,227
4,795
Corporate and others
(674)
390
Total segment investment income
6,475
9,703
Financial expenses
     (7,790)
(632)
(Loss)/gain from changes in fair value
(1,426)
476
Asset disposal (losses)/gains
(169)
75
Other income
2,674
3,477
Operating profit
68,524
97,257
Add: Non-operating income
1,051
900
Less: Non-operating expenses
1,243
1,455
Profit before taxation
68,332
96,702




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

Consolidated Income Statement
for the nine-month period ended 30 September 2019
Prepared by: China Petroleum & Chemical Corporation
Units: million   Currency: RMB   Type: unaudited
Items
Three-month period ended 30 September 2019
Three-month period ended 30 September 2018
Nine-month period ended 30 September 2019
Nine-month period ended 30 September 2018
Turnover and other operating revenues
       
Turnover
718,183
 756,403
2,185,016
 2,025,206
Other operating revenues
16,126
 16,315
48,289
 47,764
Subtotal
734,309
 772,718
2,233,305
 2,072,970
Operating expenses
       
Purchased crude oil, products and operating supplies and expenses
(591,303)
 (619,364)
(1,798,485)
 (1,614,161)
Selling, general and administrative expenses
(13,269)
 (16,182)
(38,034)
 (47,514)
Depreciation, depletion and amortization
(26,387)
 (28,146)
(79,071)
 (80,048)
Exploration expenses, including dry holes
(2,276)
 (2,357)
(6,623)
 (6,719)
Personnel expenses
(20,936)
 (17,656)
(59,157)
 (54,996)
Taxes other than income tax
(61,685)
 (64,824)
(181,931)
 (183,545)
Other operating income/(expense), net
749
 100
(1,664)
 (122)
Total operating expenses
(715,107)
 (748,429)
(2,164,965)
 (1,987,105)
Operating profit
19,202
 24,289
68,340
 85,865
Finance costs
       
Interest expense
(4,341)
 (2,053)
(13,261)
 (6,025)
Interest income
1,804
 2,022
5,665
 5,529
Foreign currency exchange loss, net
(90)
 (338)
(194)
 (136)
Net finance costs
(2,627)
 (369)
(7,790)
 (632)
Investment income
25
 53
256
 893
Share of profits less losses from associates and joint ventures
2,745
 4,273
8,620
 10,891
Profit before taxation
19,345
 28,246
69,426
 97,017




Income tax expense
(3,728)
 (6,337)
(13,868)
 (20,923)
Profit for the period
15,617
 21,909
55,558
 76,094
Attributable to
       
Shareholders of the Company
12,020
 17,769
44,226
 60,155
Non-controlling interests
3,597
 4,140
11,332
 15,939
Profit for the period
15,617
 21,909
55,558
 76,094
Earnings per share
       
Basic earnings per share (RMB)
0.099
0.147
0.365
0.497
Diluted earnings per share (RMB)
0.099
0.147
0.365
0.497




Consolidated Statement of Comprehensive Income
for the nine-month period ended 30 September 2019
Prepared by: China Petroleum & Chemical Corporation
Units: million   Currency: RMB   Type: unaudited
Items
Three-month period ended 30 September 2019
Three-month period ended 30 September 2018
Nine-month period ended 30 September 2019
Nine-month period ended 30 September 2018
Profit for the period
15,617
21,909
55,558
76,094
Other comprehensive income:
1,663
3,619
6,231
3,877
Items that may not be reclassified subsequently to profit or loss:
       
Equity investments at fair value through other comprehensive income
(2)
3
(22)
(14)
Items that may be reclassified subsequently to profit or loss:
       
Cash flow hedges
(248)
1,092
4,543
584
Share of other comprehensive income of associates and joint ventures
(98)
(172)
(607)
(285)
Foreign currency translation differences
2,011
2,696
2,317
3,592
Total comprehensive income
17,280
25,528
61,789
79,971
Attributable to:
       
Shareholders of the Company
13,003
20,514
49,787
62,903
Non–controlling interests
4,277
 5,014
12,002
17,068





Consolidated Balance Sheet
as at 30 September 2019
Prepared by: China Petroleum & Chemical Corporation
Units: million   Currency: RMB   Type: unaudited
Items
At 30 September 2019
At 31 December 2018
Non-current assets
   
Property, plant and equipment, net
599,551
        617,762
Construction in progress
161,274
136,963
Right-of-use assets
266,444
-
Goodwill
8,705
            8,676
Interest in associates
92,441
           89,537
Interest in joint ventures
57,070
56,184
Financial assets at fair value through other
 comprehensive income
1,428
           1,450
Deferred tax assets
19,972
          21,694
Lease prepayments
-
          64,514
Long-term prepayments and other non-current  assets
84,411
           91,408
Total non-current assets
1,291,296
       1,088,188
Current assets:
   
Cash and cash equivalents
88,850
         111,922
Time deposits with financial institutions
71,115
          55,093
Financial assets at fair value through profit and loss
10,443
         25,732
Derivatives financial assets
1,632
           7,887
Trade accounts receivable
76,157
56,993
Bills receivable
12,220
7,886
Inventories
208,740
   184,584
Prepaid expenses and other current assets
65,883
    54,023
Total current assets
535,040
  504,120
Current liabilities
   
Short-term debts
62,632
29,462
Loans from Sinopec Group Company and fellow subsidiaries
26,829
31,665
Lease liabilities
15,331
-
Derivatives financial liabilities
4,898
13,571
Trade accounts payable
217,556
186,341
Bills payable
11,058
6,416
Contract liabilities
135,888
  124,793
Other payables
119,838
  166,151
Income tax payable
3,854
    6,699
Total current liabilities
597,884
  565,098




Net current liabilities
62,844
   60,978
Total assets less current liabilities
1,228,452
1,027,210
Non-current liabilities
   
Long-term debts
52,394
51,011
Loans from Sinopec Group Company and fellow subsidiaries
42,048
42,516
Lease liabilities
180,655
-
Deferred tax liabilities
5,900
5,948
Provisions
44,894
42,800
Other non-current liabilities
30,754
28,400
Total non-current liabilities
356,645
170,675
Total net assets
871,807
856,535
Equity
   
Share capital
121,071
121,071
Reserves
603,792
596,213
Total equity attributable to shareholders of the Company
724,863
717,284
Non-controlling interests
146,944
139,251
Total equity
871,807
856,535





Consolidated Statement of Cash Flows
for the nine-month period ended 30 September 2019
Prepared by: China Petroleum & Chemical Corporation
Units: million   Currency: RMB   Type: unaudited
Items
Nine-month period ended 30 September 2019
Nine-month period ended 30 September 2018
Net cash generated from operating activities(a)
81,398
137,919
Investing activities
   
Capital expenditure
(67,186)
(50,466)
Exploratory wells expenditure
(6,724)
(3,998)
Purchase of investments, investments in associates and
investments in joint ventures
(4,096)
(6,551)
Payments for financial assets at fair value through profit or loss
(10,200)
(4,000)
Proceeds from sale of financial assets at fair value through profit or loss
25,350
48,000
Payment for acquisition of subsidiary, net of cash acquired
-
(3,188)
Proceeds from disposal of investments and investments in associates
805
1,695
Proceeds from disposal of property, plant, equipment and other non-current assets
433
8,490
Increase in time deposits with maturities over three months
(77,339)
(53,357)
Decrease in time deposits with maturities over three months
56,107
50,080
Interest received
3,925
2,687
Investment and dividend income received
8,173
7,338
Net cash used in investing activities
(70,752)
(3,270)
Financing activities
   
Proceeds from bank and other loans
469,696
526,630
Repayments of bank and other loans
(441,579)
(517,451)
Contributions to subsidiaries from non-controlling interests
2,222
874
Dividends paid by the Company
(46,007)
(67,800)
Distributions by subsidiaries to non-controlling interests
(4,659)
(14,006)
Interest paid
(4,781)
(4,122)
Repayments of lease liabilities
(9,173)
-
Payments made to acquire non-controlling interests
-
(23)
Proceeds from other financing activities
250
-
Net cash used in financing activities
(34,031)
(75,898)
Net (decrease)/increase in cash and cash equivalents
(23,385)
58,751
Cash and cash equivalents at 1 January
111,922
113,218
Effect of foreign currency exchange rate changes
313
315
Cash and cash equivalents at 30 September
88,850
172,284




Note to consolidated statement of Cash Flows
for the nine-month period ended 30 September 2019
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
Nine-month period ended 30 September 2019
Nine-month period ended 30 September 2018
Operating activities
   
Profit before taxation
69,426
97,017
Adjustments for:
   
Depreciation, depletion and amortization
79,071
80,048
Dry hole costs written off
4,553
5,534
Share of profits from associates and joint ventures
(8,620)
(10,891)
Investment income
(256)
(893)
Interest income
(5,665)
(5,529)
Interest expense
13,261
6,025
Loss on foreign currency exchange rate changes and derivative financial instruments
430
5,465
Loss/(Gain) on disposal of property, plant, equipment and other non-current assets, net
248
(75)
Impairment reversal on assets
91
704
Credit impairment losses
7
-
Operating profit before change of operating capital
152,546
177,405
Accounts receivable and other current assets
(22,910)
(81,391)
Inventories
(14,055)
(43,745)
Accounts payable and other current liabilities
(19,003)
115,295
Subtotal
96,578
167,564
Income tax paid
(15,180)
(29,645)
Net cash generated from operating activities
81,398
137,919





Segment Reporting
for the nine-month period ended 30 September 2019
Prepared by: China Petroleum & Chemical Corporation
Units: million   Currency: RMB   Type: unaudited
Items
Nine-month period ended 30 September 2019
Nine-month period ended 30 September 2018
Turnover
   
Exploration and production
   
External sales
79,424
62,271
Inter-segment sales
66,262
71,033
Subtotal
145,686
133,304
Refining
   
External sales
105,986
109,029
Inter-segment sales
801,310
820,020
Subtotal
907,296
929,049
Marketing and distribution
   
External sales
1,030,178
1,028,274
Inter-segment sales
2,719
4,092
Subtotal
1,032,897
1,032,366
Chemicals
   
External sales
327,637
344,753
Inter-segment sales
42,508
46,626
Subtotal
370,145
391,379
Corporate and others
   
External sales
641,791
480,879
Inter-segment sales
473,187
458,916
Subtotal
1,114,978
939,795
Elimination of inter-segment sales
(1,385,986)
(1,400,687)
Turnover
2,185,016
2,025,206
Other operating revenues
   
Exploration and production
6,722
6,656
Refining
3,829
3,774
Marketing and distribution
25,436
24,944
Chemicals
10,912
11,400
Corporate and others
1,390
990
Other operating revenues
48,289
47,764
Turnover and other operating revenues
2,233,305
2,072,970
Result
 
 
Operating (loss)/profit
 
 
By segment
 
 
Exploration and production
8,718
(1,081)
Refining
22,500
54,680




Marketing and distribution
23,245
23,389
Chemicals
16,560
23,944
Corporate and others
(2,439)
(7,627)
Elimination
(244)
(7,440)
Total segment operating profit
68,340
85,865
Share of profits from associates and joint ventures
   
Exploration and production
2,256
2,064
Refining
(802)
583
Marketing and distribution
2,337
2,255
Chemicals
3,237
4,733
Corporate and others
1,592
1,256
Aggregate share of profits from associates and joint ventures
8,620
10,891
Investment income/(losses)
   
Exploration and production
(3)
2
Refining
35
16
Marketing and distribution
63
30
Chemicals
2
36
Corporate and others
159
809
Aggregate investment income
256
893
Net finance costs
(7,790)
(632)
Profit before taxation
69,426
97,017





4.3
Differences between Consolidated Financial Statements prepared in accordance 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 recognized 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 recognized 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
Nine-month period ended 30 September 2019
Nine-month period ended 30 September 2018
Net profit under CASs
 54,464
75,779
Adjustments:
   
Government grants (i)
 42
71
Safety production fund (ii)
 1,229
1,140
Others
 (177)
(896)
Profit for the period under IFRS
 55,558
76,094





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
At 30 September 2019
At 31 December 2018
Shareholders’ equity under CASs
872,889
857,659
Adjustments:
   
Government grants(i)
(1,082)
(1,124)