China Petroleum & Chemical Corp 6-K, filed Apr 30, 2020
China Petroleum & Chemical Corp (SNPMF)
6-K
2020-04-30
For: 2020-04-29
View Original
Added on
April 06, 2026
About this 6-K
China Petroleum & Chemical Corp filed this 6-K on April 30, 2020.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
The Securities Exchange Act of 1934
For the month of April 2020
CHINA PETROLEUM & CHEMICAL CORPORATION
22 Chaoyangmen North Street,
Chaoyang District, Beijing, 100728
People's Republic of China
Tel: (8610) 59960114
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
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Form 20-F
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X
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Form 40-F
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(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
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Yes
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No
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X
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(If "Yes" is marked, indicate below the file number assigned to registrant in connection with Rule 12g3-2(b): 82-__________. )
N/A
This Form 6-K consists of:
1. an announcement regarding 2020 first quarterly
report of China Petroleum & Chemical Corporation (the “Registrant”); and
2. an announcement regarding connected transaction of absorption and merger of Zhanjiang
Dongxing;
Each made by the Registrant on April 29, 2020.
Document 1
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 First Quarterly Report for 2020
This announcement is made pursuant to Rule 13.09 and Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong
Kong Limited and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571, Laws of Hong Kong).
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By Order of the Board
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|
|
China Petroleum & Chemical Corporation
|
|
|
Huang Wensheng
|
|
|
Vice President and Secretary to the Board of Directors
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Beijing, the PRC,
29 April 2020
As of the date of this announcement, directors of the Company are: Zhang Yuzhuo*, Ma
Yongsheng#, Yu Baocai*, Ling Yiqun#, Li Yong*, Tang Min+, Fan Gang+, Cai Hongbin+, Ng, Kar Ling Johnny+
# Executive
Director
* Non-executive
Director
+ Independent
Non-executive Director
1
China Petroleum & Chemical Corporation
The First Quarterly Report for 2020
29 April 2020
Beijing, China
2
| 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 2020 was approved at the 14th 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.
|
3
| 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 2020
|
As of 31 December 2019
|
Changes from the end of the preceding year to the end of the reporting period (%)
|
|||||||||
|
Total assets
|
1,807,539
|
1,755,071
|
3.0
|
|||||||||
|
Total equity attributable to equity shareholders of the Company
|
712,350
|
739,169
|
(3.6
|
)
|
||||||||
RMB million
|
Three-month period ended 31 March
|
||||||||||||
|
Items
|
2020
|
2019
|
Changes over the same period of the preceding year (%)
|
|||||||||
|
Net cash flow from operating activities
|
(68,125
|
)
|
(14,609
|
)
|
-
|
|||||||
|
Operating income
|
555,502
|
717,579
|
(22.6
|
)
|
||||||||
|
Net profit attributable to equity shareholders of the Company
|
(19,782
|
)
|
14,763
|
-
|
||||||||
|
Net profit attributable to equity shareholders of the Company excluding extraordinary gains and losses
|
(20,444
|
)
|
14,370
|
-
|
||||||||
|
Weighted average return on net assets (%)
|
(2.73
|
)
|
2.03
|
(4.76) percentage points
|
||||||||
|
Basic earnings per share (RMB)
|
(0.163
|
)
|
0.122
|
-
|
||||||||
|
Diluted earnings per share (RMB)
|
(0.163
|
)
|
0.122
|
-
|
||||||||
RMB million
|
During the reporting period
|
||||
|
Extraordinary items
|
(income)/expenses（RMB million）
|
|||
|
Net gain on disposal of non-current assets
|
(60
|
)
|
||
|
Donations
|
73
|
|||
|
Government grants
|
(1,164
|
)
|
||
|
Gains on holding and disposal of various investments
|
(26
|
)
|
||
|
Other extraordinary income and expenses, net
|
255
|
|||
|
Subtotal
|
(922
|
)
|
||
|
Tax effect
|
234
|
|||
|
Total
|
(688
|
)
|
||
|
Attributable to:
|
||||
|
Equity shareholders of the Company
|
(662
|
)
|
||
|
Minority interests
|
(26
|
)
|
||
4
| 2.1.2 |
Principal financial data and indicators prepared in accordance with International Financial Reporting Standards (IFRS)
|
|
RMB million
|
||||||||||||
|
Items
|
As of 31 March
2020
|
As of 31 December
2019
|
Changes from the end of the preceding year to the end of the reporting period (%)
|
|||||||||
|
Total assets
|
1,807,539
|
1,755,071
|
3.0
|
|||||||||
|
Total equity attributable to shareholders of the Company
|
711,343
|
738,150
|
(3.6
|
)
|
||||||||
|
RMB million
|
||||||||||||
|
Items
|
Three-month period ended 31 March
|
Changes over the same period of the preceding year (%)
|
||||||||||
|
2020
|
2019
|
|||||||||||
|
Net cash generated from operating activities
|
(68,125
|
)
|
(14,609
|
)
|
-
|
|||||||
|
Operating profit
|
(26,305
|
)
|
24,841
|
-
|
||||||||
|
Net profit attributable to shareholders of the Company
|
(19,145
|
)
|
15,468
|
-
|
||||||||
|
Basic earnings per share (RMB)
|
(0.158
|
)
|
0.128
|
-
|
||||||||
|
Diluted earnings per share (RMB)
|
(0.158
|
)
|
0.128
|
-
|
||||||||
|
Return on net assets (%)
|
(2.69
|
)
|
2.09
|
(4.78)
percentage points |
||||||||
5
| 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 553,217, including 547,424 holders of domestic A shares and 5,793 holders of overseas H shares.
|
||||||||||||
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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
|
25,389,028,547
|
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
|
997,141,120
|
0.82
|
0
|
A share
|
|||||||||
|
北京诚通金控投资有限公司
|
756,822,451
|
0.63
|
0
|
A share
|
|||||||||
|
中国人寿保险股份有限公司－分红－个人分红－005L－FH002沪
|
480,607,041
|
0.40
|
0
|
A share
|
|||||||||
|
香港中央结算有限公司
|
463,936,458
|
0.38
|
0
|
A share
|
|||||||||
|
中国人寿保险股份有限公司－传统－普通保险产品－005L－CT001沪
|
449,301,461
|
0.37
|
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
|
|||||||||
|
汇添富基金管理股份有限公司－社保基金1103组合
|
133,250,000
|
0.11
|
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:
6
Apart from中国人寿保险股份有限公司－分红－个人分红－005L-FH002沪和中国人寿保险股份有限公司－传统－普通保险产品－005L-CT001沪 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.
7
| 2.3 |
Review of operating results
|
In the first quarter of 2020, as the COVID-19 outbreak spread worldwide, the world economy faced mounting downside risk packing with notably increasing instability and
uncertainty. China’s GDP decreased by 6.8% year on year. Due to plunging market demand for petroleum and petrochemical products coupled with slump of crude oil price, oil
and gas industry was severely impacted.
Facing the complicated and severe situation, the Company adhered to the principles of “concentrating material tasks, system optimisation, controlling risk and seizing
opportunities out of crisis”, coordinated epidemic prevention and control with work resumption, brought our advantages of integrated business into full play, optimised production plan, refined operation plan, adjusted products slate, optimised
inventory, expanded market, and tapped potentials and reduced cost to minimize the negative impact and maintained safe and steady operations. In particular, to combat the COVID-19, we maintained a stable supply of oil and gas, made great efforts to
increase production of medical-use materials, coordinated online and offline non-fuel business to facilitate our customers with wider variety of products and services, and advanced resumption of work and production with industry chain partners.
In accordance with China Accounting Standards for Business Enterprises, net
profit attributable to equity shareholders of the Company was RMB -19.782 billion. In accordance with IFRS, net profit attributable to equity shareholders of the Company was RMB -19.145 billion.
Exploration and Production: Under low crude oil price environment, we pressed ahead with high-efficiency exploration and paid more efforts on profit-oriented development, reduced cost and expenditure on all fronts and accelerated the formation of
an integrated value chain of natural gas business including production, supply, storage and marketing. In exploration, we focused on organisation and operation of major projects and new discovery breakthrough. In crude oil development, we pushed to build profitable production capacity, and deepened structure adjustment in mature oil fields. In natural gas development, we expanded the market and promoted a
coordinated growth along the value chain. In the first quarter, oil and gas production of the Company was 112.28 million barrels of oil equivalent, among which the production of crude oil was broadly flat compared with the same period of last year. Exploration and Production Segment realised an operating profit of RMB 1.518 billion
|
Three-month period ended 31 March
|
Changes
|
||||||||||||
|
Exploration and Production
|
Unit
|
2020
|
2019
|
(%)
|
|||||||||
|
Oil and gas production
|
million boe
|
112.28
|
113.46
|
(1.0
|
)
|
||||||||
|
Crude oil production
|
million barrels
|
70.65
|
70.81
|
(0.2
|
)
|
||||||||
|
China
|
million barrels
|
62.11
|
61.55
|
0.9
|
|||||||||
|
Overseas
|
million barrels
|
8.54
|
9.26
|
(7.8
|
)
|
||||||||
|
Natural gas production
|
billion cubic feet
|
249.68
|
255.79
|
(2.4
|
)
|
||||||||
|
Realised crude oil price
|
USD/barrel
|
49.15
|
57.66
|
(14.8
|
)
|
||||||||
|
Realised natural gas price
|
USD/thousand cubic feet
|
6.43
|
7.07
|
(9.2
|
)
|
||||||||
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: Facing
severe situation of plunged market demand, high-level inventory and slump of crude oil
8
price, we persistently coordinated the integration of production and marketing, optimised allocation of resources and product slate based on market demand and
continuously implemented low sulfur fuel oil projects. We coordinated domestic and overseas markets and increased the export of refined oil products, maintaining a steady operation of refining facility. In the first quarter, refinery throughput was
53.74 million tonnes, decreased by 13% year on year. The refining segment’s operating loss was RMB 25.794 billion.
|
Three-month period ended 31 March
|
|||||||||||||
|
Refining
|
Unit
|
2020
|
2019
|
Changes
(%)
|
|||||||||
|
Refinery throughput
|
million tonnes
|
53.74
|
61.78
|
(13.0
|
)
|
||||||||
|
Gasoline, diesel and kerosene production
|
million tonnes
|
33.00
|
39.44
|
(16.3
|
)
|
||||||||
|
Gasoline
|
million tonnes
|
13.02
|
15.87
|
(18.0
|
)
|
||||||||
|
Diesel
|
million tonnes
|
14.19
|
16.03
|
(11.5
|
)
|
||||||||
|
Kerosene
|
million tonnes
|
5.79
|
7.54
|
(23.2
|
)
|
||||||||
|
Light chemical feedstock production
|
million tonnes
|
9.84
|
10.07
|
(2.2
|
)
|
||||||||
|
Light product yield
|
%
|
75.31
|
76.14
|
(0.83)
percentage points
|
|||||||||
|
Refining yield
|
%
|
94.64
|
94.76
|
(0.12)
percentage points
|
|||||||||
Note: Including 100% production of domestic joint ventures.
Marketing and Distribution: To address the dramatic decline of market demand, we enhanced market analysis, pressed ahead measures for market expansion, promoted targeted marketing strategy and tapped the potentials of distribution network. In order to
satisfy the market demands during the epidemic, we innovated the non-fuel business model by coordinating online and offline business with wider variety of products and services, which not only realised a beneficial exploration of the sales model
but also provided convenience to our consumers. In the first quarter, total sales volume of refined oil products was 53.68 million tonnes and marketing and distribution segment’s operating loss was RMB 1.536 billion.
|
Three-month period ended 31 March
|
|||||||||||||
|
Marketing and Distribution
|
Unit
|
2020
|
2019
|
Changes
(%)
|
|||||||||
|
Total sales volume of refined oil products
|
million tonnes
|
48.61
|
62.37
|
(22.1
|
)
|
||||||||
|
Total domestic sales volume of refined oil products
|
million tonnes
|
32.48
|
45.61
|
(28.8
|
)
|
||||||||
|
Retail
|
million tonnes
|
21.83
|
30.20
|
(27.7
|
)
|
||||||||
|
Direct sales & Distribution
|
million tonnes
|
10.65
|
15.41
|
(30.9
|
)
|
||||||||
|
Annualized average throughput per station
|
tonnes
|
2,844
|
3,939
|
(27.8
|
)
|
||||||||
Note: The total sales volume of refined oil products includes the amount of trading volume.
Chemicals: Under the circumstances of dramatic demand decline and price tumble of chemical products,
9
we actively optimised resources allocation, reduced feedstock cost, adjusted operation plan and enhanced the dynamic optimisation of facilities and
product chain, and improved the utilisation and production scheduling based on market demand. Giving full play to our industry advantages, we extended business value chain by increasing production of medical-use materials to ensure market supply.
We put more efforts on market expansion to create space for production optimisation and adjustment as well as facilities stable operation. In the first quarter, the ethylene production was 3.026 million tonnes, being flat compared with the same
period of last year, synthetic resin production increased by 2.8% year on year. The total chemical sales volume was 17.95 million tonnes. The Chemical segment’s operating loss was RMB 1.568 billion.
|
Three-month period ended 31 March
|
|||||||||||||
|
Chemicals
|
Unit
|
2020
|
2019
|
Changes
(%)
|
|||||||||
|
Ethylene
|
thousand tonnes
|
3,026
|
3,049
|
(0.8
|
)
|
||||||||
|
Synthetic resin
|
thousand tonnes
|
4,293
|
4,178
|
2.8
|
|||||||||
|
Synthetic rubber
|
thousand tonnes
|
256
|
271
|
(5.5
|
)
|
||||||||
|
Monomers and polymers for synthetic fibre
|
thousand tonnes
|
2,333
|
2,575
|
(9.4
|
)
|
||||||||
|
Synthetic fibre
|
thousand tonnes
|
266
|
322
|
(17.4
|
)
|
||||||||
Note: Including 100% production of domestic joint ventures.
Capital expenditure: In the first quarter, total capital expenditures of the
Company was RMB 13.2 billion. Capital expenditure for the exploration and production segment was RMB 6.1 billion, mainly for Shengli and Northwest crude oil development projects, Fuling and Weirong shale gas projects. Capital expenditure for the
refining segment was RMB 2.4 billion, mainly for Zhongke Refining and Petrochemical project, Zhenhai, Tianjin, Maoming and Beihai refining upgrading projects, low sulfur fuel oil projects and high-end carbon materials projects. Capital expenditure
for the marketing and distribution segment was RMB 2.6 billion, mainly for construction of service stations, refined oil products depots and non-fuel businesses. Capital expenditure for the chemicals segment was RMB 2.1 billion, mainly for Zhongke
Refining and Petrochemical project, Zhenhai, Gulei, Sinopec-SK ethylene projects renovation, Hainan ethylene projects.
| 2.4 |
Business Prospects
|
China’s epidemic prevention and control trend has been further consolidated, the country’s economic and social activities have gradually returned to normal, the
production and living order has been restored at a faster pace, and the pent-up demand for petroleum and petrochemical products is being released. Under this opportunity, we have initiated a campaign that will last for 100 days to address the tough
challenges and to improve performance. With management and staffs joint efforts, we are to reinforce measures on market expansion, operations optimisation, cost reduction, tapping potentials, and maintaining safe and steady operations, to minimise the negative impact of the epidemic. We will adjust dynamically the production and operation arrangement and the investment plan, focusing on achieving a
high-quality and more profitable operation. While ensuring prevention and control of the pandemic and maintaining safe and stable operation, we will give priority to the following tasks:
More vigorous efforts on market expansion. We will keep pace with the market recovery and the industry utilisation rate to seize the market opportunities, provide
targeted services to reinforce the market share. Through innovation of business model and analysis of consumption demand changes, we will ex-
10
ploit potential demand to expand market share. By giving full play to the advantages of the industry chain, we will strengthen cooperation with partner and realise
coordinative development.
More vigorous efforts on optimisation and adjustment. We will bring our advantages of
integrated business into full play, refine the allocation of resources, and coordinate all the activities including procurement, transportation, production, storage and marketing. In the E&P segment, we will strengthen the overall coordination
of "investment, reserves, output, cost, and profit". In the mid- and down-stream, we will coordinate the operation, feedstock slate, product mix and regional resources, accelerate advantages cultivation and production capacity building, and
reinforce the effort in the integration of the production with the marketing.
More vigorous efforts on tapping potentials and cost reduction. We will conduct fine management and strengthen cost control involving all employees, covering all
resources and conducting in all processes. We will improve the capital efficiency, expand financing channels and reduce financing cost.
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.
|
Increase/(Decrease)
|
|||||||||||||||||
|
As of 31 March
2020
|
As of 31
December
2019
|
Amount
|
Percentage
|
||||||||||||||
|
Items of Consolidated Balance Sheet
|
RMB million
|
RMB million
|
RMB million
|
（%）
|
Main reasons for changes
|
||||||||||||
|
Financial assets held for trading
|
2,012
|
3,319
|
(1,307
|
)
|
(39.4
|
)
|
Receipt of the structured deposits at maturity
|
||||||||||
|
Derivative financial assets
|
14,459
|
837
|
13,622
|
1,627.5
|
Changes of fair value loss and profit position of derivative hedging financial instruments due to fluctuation of crude oil price
|
||||||||||||
|
Derivative financial liabilities
|
26,362
|
2,729
|
23,633
|
866.0
|
|||||||||||||
|
Prepayments
|
7,296
|
5,066
|
2,230
|
44.0
|
Increase in projects down payment
|
||||||||||||
|
Other receivables
|
57,149
|
24,109
|
33,040
|
137.0
|
Increase in margin deposit in financial derivatives business due to decline of crude oil price
|
||||||||||||
|
Short-term loans
|
98,203
|
31,196
|
67,007
|
214.8
|
Increase in low-interest short-term loans
|
||||||||||||
|
Taxes payable
|
37,622
|
69,339
|
(31,717
|
)
|
(45.7
|
)
|
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
|
||||||||||
|
Other current liabilities
|
19,997
|
-
|
19,997
|
-
|
Issuing short-term debentures payable of RMB 20 billion
|
||||||||||||
|
Long-term loans
|
52,870
|
39,625
|
13,245
|
33.4
|
Increase in project loans of subsidiaries
|
||||||||||||
|
Other comprehensive income
|
(7,983
|
)
|
(321
|
)
|
(7,662
|
)
|
-
|
Increase in fair value loss of hedging business for crude oil
|
|||||||||
11
|
For three-month period ended 31 March
|
Increase/(Decrease)
|
||||||||||||||||
|
2020
|
2019
|
Amount
|
Percentage
|
Main reasons for changes
|
|||||||||||||
|
Items of Consolidated Income Statement
|
RMB Million
|
RMB Million
|
RMB Million
|
（%）
|
|||||||||||||
|
Gains/ (losses) from
changes in fair value
|
8,342
|
(2,226
|
)
|
10,568
|
-
|
Increase in fair value profit on derivative financial instruments not qualified as hedging
|
|||||||||||
|
Impairment losses
|
(10,360
|
)
|
136
|
(10,496
|
)
|
-
|
Increase of inventory impairment
|
||||||||||
|
For three-month period ended 31 March
|
Increase/(Decrease)
|
||||||||||||||||
|
2020
|
2019
|
Amount
|
Percentage
|
||||||||||||||
|
Items of consolidated cash flow statement
|
RMB
million
|
RMB
million
|
RMB million
|
（%）
|
Main reasons for changes
|
||||||||||||
|
Other cash paid relating to operating activities
|
(59,028
|
)
|
(39,806
|
)
|
(19,222
|
)
|
-
|
Mainly due to increase in margin deposit of financial derivative business
|
|||||||||
|
Cash received from disposal of investments
|
3,402
|
9,636
|
(6,234
|
)
|
(64.7
|
)
|
Decrease in structured deposits at maturity
|
||||||||||
|
Other cash received relating to investing activities
|
19,162
|
13,165
|
5,997
|
45.6
|
Increase in value of certificate of deposit, over three months, expired and recovered
|
||||||||||||
|
Other cash paid relating to investing activities
|
(14,094
|
)
|
(24,388
|
)
|
10,294
|
-
|
Decrease in the value of certificate of deposit, over three months
|
||||||||||
|
Cash received from borrowings
|
274,615
|
149,622
|
124,993
|
83.5
|
Increase in low-interest short-term loans
|
||||||||||||
|
Cash repayments of borrowings
|
(172,518
|
)
|
(118,511
|
)
|
(54,007
|
)
|
-
|
Increase 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
|
|
|
29 April, 2020
|
12
| 4 |
Appendix
|
| 4.1 |
Quarterly financial statements prepared under China Accounting Standards for Business Enterprises (CASs)
|
|
Consolidated Balance Sheet
|
||||||||
|
as at 31 March 2020
|
||||||||
|
Prepared by: China Petroleum & Chemical Corporation
|
||||||||
|
Units: million Currency: RMB Type: unaudited
|
||||||||
|
Items
|
At 31 March 2020
|
At 31 December 2019
|
||||||
|
Current assets:
|
||||||||
|
Cash at bank and on hand
|
138,773
|
127,927
|
||||||
|
Financial assets held for trading
|
2,012
|
3,319
|
||||||
|
Derivative financial assets
|
14,459
|
837
|
||||||
|
Accounts receivable
|
54,246
|
54,865
|
||||||
|
Receivables financing
|
8,746
|
8,622
|
||||||
|
Prepayments
|
7,296
|
5,066
|
||||||
|
Other receivables
|
57,149
|
24,109
|
||||||
|
Inventories
|
183,277
|
192,442
|
||||||
|
Other current assets
|
30,074
|
28,669
|
||||||
|
Total current assets
|
496,032
|
445,856
|
||||||
|
Non-current assets:
|
||||||||
|
Long-term equity investments
|
152,561
|
152,204
|
||||||
|
Other equity instrument investments
|
1,525
|
1,521
|
||||||
|
Fixed assets
|
611,564
|
622,423
|
||||||
|
Construction in progress
|
177,021
|
173,482
|
||||||
|
Right-of-use assets
|
197,349
|
198,051
|
||||||
|
Intangible assets
|
108,039
|
108,956
|
||||||
|
Goodwill
|
8,716
|
8,697
|
||||||
|
Long-term deferred expenses
|
8,531
|
8,930
|
||||||
|
Deferred tax assets
|
29,343
|
17,616
|
||||||
|
Other non-current assets
|
16,858
|
17,335
|
||||||
|
Total non-current assets
|
1,311,507
|
1,309,215
|
||||||
|
Total assets
|
1,807,539
|
1,755,071
|
||||||
13
|
Current liability:
|
||||||||
|
Short-term loans
|
98,203
|
31,196
|
||||||
|
Derivative financial liabilities
|
26,362
|
2,729
|
||||||
|
Bills payable
|
14,479
|
11,834
|
||||||
|
Accounts payable
|
154,103
|
187,958
|
||||||
|
Contract liabilities
|
137,563
|
126,735
|
||||||
|
Employee benefits payable
|
7,126
|
4,769
|
||||||
|
Taxes payable
|
37,622
|
69,339
|
||||||
|
Other payables
|
73,908
|
72,324
|
||||||
|
Non-current liabilities due within one year
|
69,903
|
69,490
|
||||||
|
Other current liabilities
|
19,997
|
-
|
||||||
|
Total current liabilities
|
639,266
|
576,374
|
||||||
|
Non-current liabilities:
|
||||||||
|
Long-term loans
|
52,870
|
39,625
|
||||||
|
Debentures payable
|
19,349
|
19,157
|
||||||
|
Lease liabilities
|
178,774
|
177,674
|
||||||
|
Provisions
|
43,375
|
43,163
|
||||||
|
Deferred tax liabilities
|
7,273
|
6,809
|
||||||
|
Other non-current liabilities
|
18,966
|
15,364
|
||||||
|
Total non-current liabilities
|
320,607
|
301,792
|
||||||
|
Total liabilities
|
959,873
|
878,166
|
||||||
|
Shareholders’ equity:
|
||||||||
|
Share capital
|
121,071
|
121,071
|
||||||
|
Capital reserve
|
122,128
|
122,127
|
||||||
|
Other comprehensive income
|
(7,983
|
)
|
(321
|
)
|
||||
|
Specific reserve
|
2,365
|
1,741
|
||||||
|
Surplus reserves
|
207,423
|
207,423
|
||||||
|
Retained earnings
|
267,346
|
287,128
|
||||||
|
Total equity attributable to shareholders of the Company
|
712,350
|
739,169
|
||||||
|
Minority interests
|
135,316
|
137,736
|
||||||
|
Total shareholders’ equity
|
847,666
|
876,905
|
||||||
|
Total liabilities and shareholders’ equity
|
1,807,539
|
1,755,071
|
||||||
|
Zhang Yuzhuo
|
Ma Yongsheng
|
Shou Donghua
|
|
Chairman
|
President
|
Chief Financial Officer
|
14
Balance Sheet
as at 31 March 2020
Prepared by: China Petroleum & Chemical Corporation
|
Units: million Currency: RMB Type: unaudited
|
||||||||
|
Items
|
At 31 March 2020
|
At 31 December 2019
|
||||||
|
Current assets：
|
||||||||
|
Cash at bank and on hand
|
70,783
|
54,072
|
||||||
|
Derivative financial assets
|
940
|
940
|
||||||
|
Accounts receivable
|
22,184
|
21,544
|
||||||
|
Receivables financing
|
751
|
207
|
||||||
|
Prepayments
|
3,685
|
2,665
|
||||||
|
Other receivables
|
75,833
|
78,872
|
||||||
|
Inventories
|
40,926
|
49,116
|
||||||
|
Other current assets
|
22,555
|
25,149
|
||||||
|
Total current assets
|
237,657
|
232,565
|
||||||
|
Non-current assets：
|
||||||||
|
Long-term equity investments
|
306,225
|
304,687
|
||||||
|
Other equity instrument investments
|
395
|
395
|
||||||
|
Fixed assets
|
284,804
|
291,547
|
||||||
|
Construction in progress
|
62,353
|
60,493
|
||||||
|
Right-of-use assets
|
112,968
|
112,832
|
||||||
|
Intangible assets
|
8,654
|
8,809
|
||||||
|
Long-term deferred expenses
|
2,390
|
2,630
|
||||||
|
Deferred tax assets
|
15,847
|
7,315
|
||||||
|
Other non-current assets
|
2,314
|
2,490
|
||||||
|
Total non-current assets
|
795,950
|
791,198
|
||||||
|
Total assets
|
1,033,607
|
1,023,763
|
||||||
|
Current liabilities：
|
||||||||
|
Short-term loans
|
64,609
|
19,919
|
||||||
|
Derivative financial liabilities
|
157
|
157
|
||||||
|
Bills payable
|
4,862
|
4,766
|
||||||
|
Accounts payable
|
70,495
|
75,352
|
||||||
|
Contract liabilities
|
4,769
|
5,112
|
||||||
|
Employee benefits payable
|
2,903
|
1,214
|
||||||
|
Taxes payable
|
25,033
|
43,025
|
||||||
|
Other payables
|
108,861
|
118,064
|
||||||
|
Non-current liabilities due within one year
|
59,775
|
59,596
|
||||||
|
Other current liabilities
|
19,997
|
-
|
||||||
|
Total current liabilities
|
361,461
|
327,205
|
||||||
15
|
Non-current liabilities：
|
||||||||
|
Long-term loans
|
12,125
|
12,680
|
||||||
|
Debentures payable
|
7,000
|
7,000
|
||||||
|
Lease liabilities
|
108,782
|
107,783
|
||||||
|
Provisions
|
34,825
|
34,514
|
||||||
|
Other non-current liabilities
|
4,337
|
4,471
|
||||||
|
Total non-current liabilities
|
167,069
|
166,448
|
||||||
|
Total liabilities
|
528,530
|
493,653
|
||||||
|
Shareholders’ equity：
|
||||||||
|
Share capital
|
121,071
|
121,071
|
||||||
|
Capital reserve
|
68,841
|
68,841
|
||||||
|
Other comprehensive income
|
(6,322
|
)
|
1,181
|
|||||
|
Specific reserve
|
1,241
|
949
|
||||||
|
Surplus reserves
|
207,423
|
207,423
|
||||||
|
Retained earnings
|
112,823
|
130,645
|
||||||
|
Total shareholders’ equity
|
505,077
|
530,110
|
||||||
|
Total liabilities and shareholders’ equity
|
1,033,607
|
1,023,763
|
||||||
|
Zhang Yuzhuo
|
Ma Yongsheng
|
Shou Donghua
|
|
Chairman
|
President
|
Chief Financial Officer
|
16
Consolidated Income Statement
for the three-month period ended 31 March 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
|
Items
|
Three-month period
ended 31 March
2020
|
Three-month period
ended 31 March
2019
|
|||||||
|
I. Operating income
|
555,502
|
717,579
|
|||||||
|
II. Total Operating costs
|
583,107
|
693,269
|
|||||||
|
Including: Operating costs
|
499,274
|
596,412
|
|||||||
|
Taxes and surcharges
|
49,691
|
60,459
|
|||||||
|
Selling and distribution expenses
|
14,653
|
14,748
|
|||||||
|
General and administrative expenses
|
14,128
|
15,485
|
|||||||
|
Research and development costs
|
1,083
|
1,292
|
|||||||
|
Financial expenses
|
2,010
|
2,330
|
|||||||
|
Exploration expenses, including dry holes
|
2,268
|
2,543
|
|||||||
|
Add:
|
Other income
|
1,100
|
761
|
||||||
|
Investment income
|
153
|
1,285
|
|||||||
|
Gains/(losses) from changes in fair value
|
8,342
|
(2,226
|
)
|
||||||
|
Credit impairment losses
|
5
|
(19
|
)
|
||||||
|
Impairment losses
|
(10,360
|
)
|
136
|
||||||
|
Asset disposal gains/(losses)
|
60
|
(64
|
)
|
||||||
|
III. Operating profit
|
(28,305
|
)
|
24,183
|
||||||
|
Add:
|
Non-operating income
|
215
|
243
|
||||||
|
Less:
|
Non-operating expenses
|
471
|
416
|
||||||
|
IV. Profit before taxation
|
(28,561
|
)
|
24,010
|
||||||
|
Less:
|
Income tax expense
|
(7,529
|
)
|
5,539
|
|||||
|
V. Net profit
|
(21,032
|
)
|
18,471
|
||||||
|
Classification by going concern:
|
|||||||||
|
(i) Continuous operating net profit
|
(21,032
|
)
|
18,471
|
||||||
|
(ii) Termination of net profit
|
-
|
-
|
|||||||
|
Classification by ownership:
|
|||||||||
|
(i)Equity shareholders of the Company
|
(19,782
|
)
|
14,763
|
||||||
|
(ii) Minority interests
|
(1,250
|
)
|
3,708
|
||||||
17
Consolidated Income Statement (Continued)
|
VI. Other comprehensive income
|
(7,360
|
)
|
3,759
|
|||||
|
Items that may not be reclassified subsequently to profit or loss:
|
||||||||
|
Changes in fair value of other equity instrument investments
|
-
|
1
|
||||||
|
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
|
(76
|
)
|
66
|
|||||
|
Cash flow hedges
|
(8,401
|
)
|
4,853
|
|||||
|
Foreign currency translation differences
|
1,117
|
(1,161
|
)
|
|||||
|
VII. Total comprehensive income
|
(28,392
|
)
|
22,230
|
|||||
|
Equity shareholders of the Company
|
(27,103
|
)
|
19,029
|
|||||
|
Minority interests
|
(1,289
|
)
|
3,201
|
|||||
|
VIII. Earnings per share:
|
||||||||
|
(i) Basic earnings per share (RMB/Share)
|
(0.163
|
)
|
0.122
|
|||||
|
(ii) Diluted earnings per share (RMB/Share)
|
(0.163
|
)
|
0.122
|
|
Zhang Yuzhuo
|
Ma Yongsheng
|
Shou Donghua
|
|
Chairman
|
President
|
Chief Financial Officer
|
18
Income Statement
for the three-month period ended 31 March 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
|
Items
|
Three-month period
ended 31 March 2020
|
Three-month period
ended 31 March 2019
|
|||||||
|
I.Operating
income
|
199,942
|
249,978
|
|||||||
|
Less:
|
Operating costs
|
171,987
|
191,844
|
||||||
|
Taxes and surcharges
|
32,996
|
40,952
|
|||||||
|
Selling and distribution expenses
|
724
|
754
|
|||||||
|
General and administrative expenses
|
6,992
|
7,612
|
|||||||
|
Research and development costs
|
1,034
|
1,197
|
|||||||
|
Financial expenses
|
2,050
|
1,635
|
|||||||
|
Exploration expenses,
including dry holes
|
1,936
|
2,429
|
|||||||
|
Add:
|
Other income
|
896
|
631
|
||||||
|
Investment income
|
814
|
1,777
|
|||||||
|
Gains from changes in
fair value
|
400
|
20
|
|||||||
|
Credit impairment losses
|
31
|
5
|
|||||||
|
Impairment losses
|
(7,992
|
)
|
-
|
||||||
|
Asset disposal gains/ (losses)
|
1
|
(1
|
)
|
||||||
|
II. Operating profit
|
(23,627
|
)
|
5,987
|
||||||
|
Add:
|
Non-operating income
|
33
|
34
|
||||||
|
Less:
|
Non-operating expenses
|
232
|
147
|
||||||
|
III. Profit before taxation
|
(23,826
|
)
|
5,874
|
||||||
|
Less:
|
Income tax expense
|
(6,002
|
)
|
1,003
|
|||||
|
IV. Net profit
|
(17,824
|
)
|
4,871
|
||||||
|
(i) Continuous operating net profit
|
(17,824
|
)
|
4,871
|
||||||
|
(ii) Termination of net profit
|
-
|
-
|
|||||||
|
V. Other
comprehensive income
|
(7,387
|
)
|
817
|
||||||
|
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
|
49
|
(33
|
)
|
||||||
|
Cash flow hedges
|
(7,436
|
)
|
850
|
||||||
|
VI. Total comprehensive income
|
(25,211
|
)
|
5,688
|
||||||
|
Zhang Yuzhuo
|
Ma Yongsheng
|
Shou Donghua
|
|
Chairman
|
President
|
Chief Financial Officer
|
19
Consolidated Cash Flow Statement
for the three-month period ended 31 March 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
|
Items
|
Three-month period
ended 31 March 2020
|
Three-month period
ended 31 March 2019
|
||||||
|
I. Cash flows from operating activities:
|
|
|||||||
|
Cash received from sale of goods and rendering of services
|
600,228
|
760,693
|
||||||
|
Refund of taxes and levies
|
818
|
760
|
||||||
|
Other cash received relating to operating activities
|
35,326
|
31,379
|
||||||
|
Sub-total of cash inflows
|
636,372
|
792,832
|
||||||
|
Cash paid for goods and services
|
(544,121
|
)
|
(625,310
|
)
|
||||
|
Cash paid to and for employees
|
(16,826
|
)
|
(17,224
|
)
|
||||
|
Payments of taxes and levies
|
(84,522
|
)
|
(125,101
|
)
|
||||
|
Other cash paid relating to operating activities
|
(59,028
|
)
|
(39,806
|
)
|
||||
|
Sub-total of cash outflows
|
(704,497
|
)
|
(807,441
|
)
|
||||
|
Net cash flow from operating activities
|
(68,125
|
)
|
(14,609
|
)
|
||||
|
II.Cash flows from investing activities:
|
||||||||
|
Cash received from disposal of investments
|
3,402
|
9,636
|
||||||
|
Cash received from returns on investments
|
986
|
1,288
|
||||||
|
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
|
18
|
24
|
||||||
|
Other cash received relating to investing activities
|
19,162
|
13,165
|
||||||
|
Sub-total of cash inflows
|
23,568
|
24,113
|
||||||
|
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
|
(22,327
|
)
|
(23,514
|
)
|
||||
|
Cash paid for acquisition of investments
|
(1,672
|
)
|
(1,793
|
)
|
||||
|
Other cash paid relating to investing activities
|
(14,094
|
)
|
(24,388
|
)
|
||||
|
Sub-total of cash outflows
|
(38,093
|
)
|
(49,695
|
)
|
||||
|
Net cash flow from investing activities
|
(14,525
|
)
|
(25,582
|
)
|
||||
|
III.Cash flows from financing activities:
|
||||||||
|
Cash received from capital contributions
|
260
|
94
|
||||||
|
Including: Cash received from minority shareholders’ capital contributions to subsidiaries
|
260
|
94
|
||||||
|
Cash received from borrowings
|
274,615
|
149,622
|
||||||
20
Consolidated Cash Flow Statement (Continued)
|
Other cash received relating to financing activities
|
276
|
190
|
|||||||
|
Sub-total of cash inflows
|
275,151
|
149,906
|
|||||||
|
Cash repayments of borrowings
|
(172,518
|
)
|
(118,511
|
)
|
|||||
|
Cash paid for dividends, profits distribution or interest
|
(1,557
|
)
|
(1,396
|
)
|
|||||
|
Including: Subsidiaries’ cash payments for distribution of dividends or profits to minority shareholders
|
(160
|
)
|
(235
|
)
|
|||||
|
Other cash paid relating to financing activities
|
(3,492
|
)
|
(630
|
)
|
|||||
|
Sub-total of cash outflows
|
(177,567
|
)
|
(120,537
|
)
|
|||||
|
Net cash flow from financing activities
|
97,584
|
29,369
|
|||||||
|
IV. Effects of changes in foreign exchange rate
|
553
|
(340
|
)
|
||||||
|
V. Net increase/(decrease) in cash and cash equivalents
|
15,487
|
(11,162
|
)
|
||||||
|
Add：
|
Initial balance of cash and cash equivalents
|
60,313
|
111,922
|
||||||
|
VI. Ending balance of cash and cash equivalents
|
75,800
|
100,760
|
|||||||
|
Zhang Yuzhuo
|
Ma Yongsheng
|
Shou Donghua
|
|
Chairman
|
President
|
Chief Financial Officer
|
21
Cash Flow Statement
for the three-month period ended 31 March 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
|
Items
|
Three-month period
ended 31 March 2020
|
Three-month period
ended 31 March 2019
|
||||||
|
I. Cash flows from operating activities:
|
||||||||
|
Cash received from sale of goods and rendering of services
|
217,331
|
280,152
|
||||||
|
Refund of taxes and levies
|
798
|
519
|
||||||
|
Other cash received relating to operating activities
|
1,619
|
757
|
||||||
|
Sub-total of cash inflows
|
219,748
|
281,428
|
||||||
|
Cash paid for goods and services
|
(175,248
|
)
|
(208,261
|
)
|
||||
|
Cash paid to and for employees
|
(8,835
|
)
|
(9,274
|
)
|
||||
|
Payments of taxes and levies
|
(53,244
|
)
|
(76,898
|
)
|
||||
|
Other cash paid relating to operating activities
|
(5,349
|
)
|
(2,939
|
)
|
||||
|
Sub-total of cash outflows
|
(242,676
|
)
|
(297,372
|
)
|
||||
|
Net cash flow from operating activities
|
(22,928
|
)
|
(15,944
|
)
|
||||
|
II. Cash flows from investing activities:
|
||||||||
|
Cash received from disposal of investments
|
4,759
|
9,285
|
||||||
|
Cash received from returns on investments
|
1,224
|
1,270
|
||||||
|
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
|
3
|
3
|
||||||
|
Other cash received relating to investing activities
|
44,575
|
9,933
|
||||||
|
Sub-total of cash inflows
|
50,561
|
20,491
|
||||||
|
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
|
(9,307
|
)
|
(7,459
|
)
|
||||
|
Cash paid for acquisition of investments
|
(2,807
|
)
|
(1,376
|
)
|
||||
|
Other cash paid relating to investing activities
|
(47,607
|
)
|
(10,800
|
)
|
||||
|
Sub-total of cash outflows
|
(59,721
|
)
|
(19,635
|
)
|
||||
|
Net cash flow from investing activities
|
(9,160
|
)
|
856
|
|||||
|
III. Cash flows from financing activities:
|
||||||||
|
Cash received from borrowings
|
130,458
|
39,186
|
||||||
|
Other cash received relating to financing activities
|
57,475
|
-
|
||||||
|
Sub-total of cash inflows
|
187,933
|
39,186
|
||||||
|
Cash repayments of borrowings
|
(66,328
|
)
|
(35,016
|
)
|
||||
|
Cash paid for dividends or interest
|
(875
|
)
|
(1,476
|
)
|
||||
|
Other cash paid relating to financing activities
|
(72,108
|
)
|
(266
|
)
|
||||
|
Sub-total of cash outflows
|
(139,311
|
)
|
(36,758
|
)
|
||||
|
Net cash flow from financing activities
|
48,622
|
2,428
|
||||||
22
Cash Flow Statement (Continued)
|
IV. Net increase/(decrease) in cash and cash equivalents
|
16,534
|
(12,660
|
)
|
||||||
|
Add:
|
Initial balance of cash and cash equivalents
|
38,616
|
59,120
|
||||||
|
V. Ending balance of cash and cash equivalents
|
55,150
|
46,460
|
|||||||
|
Zhang Yuzhuo
|
Ma Yongsheng
|
Shou Donghua
|
|
Chairman
|
President
|
Chief Financial Officer
|
23
Segment Reporting
for the three-month period ended 31 March 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
|
Items
|
Three-monthperiod
ended31March2020
|
Three-monthperiod
ended31March2019
|
||||||
|
Income from principal operations
|
||||||||
|
Exploration and production
|
||||||||
|
External sales
|
26,944
|
29,367
|
||||||
|
Inter–segment sales
|
18,238
|
22,089
|
||||||
|
Subtotal
|
45,182
|
51,456
|
||||||
|
Refining
|
||||||||
|
External sales
|
25,145
|
34,002
|
||||||
|
Inter–segment sales
|
217,468
|
255,752
|
||||||
|
Subtotal
|
242,613
|
289,754
|
||||||
|
Marketing and distribution
|
||||||||
|
External sales
|
248,725
|
321,636
|
||||||
|
Inter–segment sales
|
1,226
|
965
|
||||||
|
Subtotal
|
249,951
|
322,601
|
||||||
|
Chemicals
|
||||||||
|
External sales
|
71,815
|
110,990
|
||||||
|
Inter–segment sales
|
10,884
|
17,121
|
||||||
|
Subtotal
|
82,699
|
128,111
|
||||||
|
Corporate and others
|
||||||||
|
External sales
|
170,003
|
205,504
|
||||||
|
Inter–segment sales
|
131,839
|
154,677
|
||||||
|
Subtotal
|
301,842
|
360,181
|
||||||
|
Elimination of inter–segment sales
|
(379,655
|
)
|
(450,604
|
)
|
||||
|
Consolidated income from principal operations
|
542,632
|
701,499
|
||||||
|
Income from other operations
|
||||||||
|
Exploration and production
|
1,272
|
1,821
|
||||||
|
Refining
|
932
|
1,251
|
||||||
|
Marketing and distribution
|
6,939
|
8,850
|
||||||
|
Chemicals
|
3,401
|
3,733
|
||||||
|
Corporate and others
|
326
|
425
|
||||||
|
Consolidated income from other operations
|
12,870
|
16,080
|
||||||
24
Segment Reporting (Continued)
|
Consolidated operating income
|
555,502
|
717,579
|
||||||
|
Operating (loss)/profit
|
||||||||
|
By segment
|
||||||||
|
Exploration and production
|
404
|
1,581
|
||||||
|
Refining
|
(26,299
|
)
|
11,481
|
|||||
|
Marketing and distribution
|
(2,621
|
)
|
7,990
|
|||||
|
Chemicals
|
(1,767
|
)
|
6,827
|
|||||
|
Corporate and others
|
(5,667
|
)
|
(582
|
)
|
||||
|
Elimination
|
-
|
(540
|
)
|
|||||
|
Total segment operating profit
|
(35,950
|
)
|
26,757
|
|||||
|
Investment income
|
||||||||
|
Exploration and production
|
476
|
777
|
||||||
|
Refining
|
(680
|
)
|
(394
|
)
|
||||
|
Marketing and distribution
|
657
|
215
|
||||||
|
Chemicals
|
(66
|
)
|
1,047
|
|||||
|
Corporate and others
|
(234
|
)
|
(360
|
)
|
||||
|
Total segment investment income
|
153
|
1,285
|
||||||
|
Financial expenses
|
(2,010
|
)
|
(2,330
|
)
|
||||
|
Gains/(losses) from changes in fair value
|
8,342
|
(2,226
|
)
|
|||||
|
Asset disposal gains/(losses)
|
60
|
(64
|
)
|
|||||
|
Other income
|
1,100
|
761
|
||||||
|
Operating profit
|
(28,305
|
)
|
24,183
|
|||||
|
Add: Non-operating income
|
215
|
243
|
||||||
|
Less: Non-operating expenses
|
471
|
416
|
||||||
|
Profit before taxation
|
(28,561
|
)
|
24,010
|
25
4.2 Quarterly financial statements prepared under International Financial Reporting
Standards (IFRS)
Consolidated Income Statement
for the three-month period ended 31 March 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
|
Items
|
Three-month period
ended 31 March 2020
|
Three-month period
ended 31 March 2019
|
||||||
|
Turnover and other operating revenues
|
||||||||
|
Turnover
|
542,632
|
701,499
|
||||||
|
Other operating revenues
|
12,870
|
16,080
|
||||||
|
Subtotal
|
555,502
|
717,579
|
||||||
|
Operating expenses
|
||||||||
|
Purchased crude oil, products and operating supplies and expenses
|
(484,322
|
)
|
(572,138
|
)
|
||||
|
Selling, general and administrative expenses
|
(10,488
|
)
|
(11,575
|
)
|
||||
|
Depreciation, depletion and amortisation
|
(25,070
|
)
|
(25,998
|
)
|
||||
|
Exploration expenses, including dry holes
|
(2,268
|
)
|
(2,543
|
)
|
||||
|
Personnel expenses
|
(18,844
|
)
|
(17,361
|
)
|
||||
|
Taxes other than income tax
|
(49,691
|
)
|
(60,459
|
)
|
||||
|
Other operating revenue/(expense), net
|
8,876
|
(2,664
|
)
|
|||||
|
Total operating expenses
|
(581,807
|
)
|
(692,738
|
)
|
||||
|
Operating profit
|
(26,305
|
)
|
24,841
|
|||||
|
Finance costs
|
||||||||
|
Interest expense
|
(3,896
|
)
|
(4,301
|
)
|
||||
|
Interest income
|
1,085
|
1,924
|
||||||
|
Foreign currency exchange loss, net
|
801
|
47
|
||||||
|
Net finance costs
|
(2,010
|
)
|
(2,330
|
)
|
||||
|
Investment income
|
29
|
55
|
||||||
|
Share of profits less losses from associates and joint ventures
|
472
|
2,232
|
||||||
|
Profit before taxation
|
(27,814
|
)
|
24,798
|
|||||
|
Income tax expense
|
7,529
|
(5,539
|
)
|
|||||
|
Profit for the period
|
(20,285
|
)
|
19,259
|
|||||
|
Attributable to：
|
||||||||
|
Owners of the Company
|
(19,145
|
)
|
15,468
|
|||||
|
Non-controlling interests
|
(1,140
|
)
|
3,791
|
|||||
|
Profit for the period
|
(20,285
|
)
|
19,259
|
|||||
|
Earnings per share
|
||||||||
|
Basic earnings per share (RMB)
|
(0.158
|
)
|
0.128
|
|||||
|
Diluted earnings per share (RMB)
|
(0.158
|
)
|
0.128
|
|||||
26
Consolidated Statement of Comprehensive Income
for the three-month period ended 31 March 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
|
Items
|
Three-month period ended 31 March 2020
|
Three-month period ended 31 March 2019
|
||||||
|
Profit for the period
|
(20,285
|
)
|
19,259
|
|||||
|
Other comprehensive income:
|
(7,360
|
)
|
3,759
|
|||||
|
Items that may not be reclassified subsequently to profit or loss:
|
||||||||
|
Equity investments at fair value through other comprehensive income
|
-
|
1
|
||||||
|
Items that may be reclassified subsequently to profit or loss:
|
||||||||
|
Share of other comprehensive income of associates and joint ventures
|
(76
|
)
|
66
|
|||||
|
Cash flow hedges
|
(8,401
|
)
|
4,853
|
|||||
|
Foreign currency translation differences
|
1,117
|
(1,161
|
)
|
|||||
|
Total comprehensive income
|
(27,645
|
)
|
23,018
|
|||||
|
Attributable to:
|
||||||||
|
Shareholders of the Company
|
(26,466
|
)
|
19,734
|
|||||
|
Non–controlling interests
|
(1,179
|
)
|
3,284
|
|||||
27
Consolidated Balance Sheet
as at 31 March 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
|
Items
|
At 31 March 2020
|
At 31 December 2019
|
||||||
|
Non-current assets：
|
||||||||
|
Property, plant and equipment, net
|
611,508
|
622,409
|
||||||
|
Construction in progress
|
177,021
|
173,482
|
||||||
|
Right-of-use assets
|
266,992
|
267,860
|
||||||
|
Goodwill
|
8,716
|
8,697
|
||||||
|
Interest in associates
|
96,691
|
95,737
|
||||||
|
Interest in joint ventures
|
55,870
|
56,467
|
||||||
|
Financial assets at fair value through other comprehensive income
|
1,525
|
1,521
|
||||||
|
Deferred tax assets
|
29,343
|
17,616
|
||||||
|
Long-term prepayments and other non-current assets
|
63,841
|
65,426
|
||||||
|
Total non-current assets
|
1,311,507
|
1,309,215
|
||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
75,800
|
60,313
|
||||||
|
Time deposits with financial institutions
|
62,973
|
67,614
|
||||||
|
Financial assets at fair value through profit and loss
|
2,012
|
3,319
|
||||||
|
Derivatives financial assets
|
14,459
|
837
|
||||||
|
Trade accounts receivable and bills receivable
|
54,246
|
54,865
|
||||||
|
Financial assets at fair value through other comprehensive income
|
8,746
|
8,622
|
||||||
|
Inventories
|
183,277
|
192,442
|
||||||
|
Prepaid expenses and other current assets
|
94,519
|
57,844
|
||||||
|
Total current assets
|
496,032
|
445,856
|
||||||
|
Current liabilities：
|
||||||||
|
Short-term debts
|
97,476
|
40,521
|
||||||
|
Loans from Sinopec Group Company and fellow subsidiaries
|
73,290
|
43,289
|
||||||
|
Lease liabilities
|
15,586
|
15,198
|
||||||
|
Derivatives financial liabilities
|
26,362
|
2,729
|
||||||
|
Trade accounts payable and bills payable
|
168,582
|
199,792
|
||||||
|
Contract liabilities
|
137,563
|
126,735
|
||||||
|
Other payables
|
119,729
|
144,846
|
||||||
|
Income tax payable
|
678
|
3,264
|
||||||
|
Total current liabilities
|
639,266
|
576,374
|
||||||
Consolidated Balance Sheet (Continued)
|
Net current liabilities
|
143,234
|
130,518
|
||||||
|
Total assets less current liabilities
|
1,168,273
|
1,178,697
|
28
|
Non-current liabilities：
|
||||||||
|
Long-term debts
|
56,235
|
49,156
|
||||||
|
Loans from Sinopec Group Company and fellow subsidiaries
|
15,984
|
9,626
|
||||||
|
Lease liabilities
|
178,774
|
177,674
|
||||||
|
Deferred tax liabilities
|
7,273
|
6,809
|
||||||
|
Provisions
|
43,375
|
43,163
|
||||||
|
Other non-current liabilities
|
20,024
|
16,434
|
||||||
|
Total non-current liabilities
|
321,665
|
302,862
|
||||||
|
Total net assets
|
846,608
|
875,835
|
||||||
|
Equity：
|
||||||||
|
Share capital
|
121,071
|
121,071
|
||||||
|
Reserves
|
590,272
|
617,079
|
||||||
|
Total equity attributable to shareholders of the Company
|
711,343
|
738,150
|
||||||
|
Non-controlling interests
|
135,265
|
137,685
|
||||||
|
Total equity
|
846,608
|
875,835
|
||||||
29
Consolidated Statement of Cash Flows
for the three-month period ended 31 March 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
|
Items
|
Three-month period ended 31 March 2020
|
Three-month period ended 31 March 2019
|
||||||
|
Net cash generated from operating activities(a)
|
(68,125
|
)
|
(14,609
|
)
|
||||
|
Investing activities
|
||||||||
|
Capital expenditure
|
(20,432
|
)
|
(21,855
|
)
|
||||
|
Exploratory wells expenditure
|
(1,895
|
)
|
(1,659
|
)
|
||||
|
Purchase of investments, investments in associates and investments in joint ventures
|
(1,672
|
)
|
(1,793
|
)
|
||||
|
Proceeds from disposal of investments and investments in associates
|
3,402
|
9,636
|
||||||
|
Proceeds from disposal of property, plant, equipment and other non-current assets
|
18
|
24
|
||||||
|
Increase in time deposits with maturities over three months
|
(13,912
|
)
|
(24,388
|
)
|
||||
|
Decrease in time deposits with maturities over three months
|
18,553
|
11,855
|
||||||
|
Interest received
|
609
|
1,310
|
||||||
|
Investment and dividend income received
|
986
|
1,288
|
||||||
|
Repayments of other investing activities
|
(182
|
)
|
-
|
|||||
|
Net cash used in investing activities
|
(14,525
|
)
|
(25,582
|
)
|
||||
|
Financing activities
|
||||||||
|
Proceeds from bank and other loans
|
274,615
|
149,622
|
||||||
|
Repayments of bank and other loans
|
(172,518
|
)
|
(118,511
|
)
|
||||
|
Contributions to subsidiaries from non-controlling interests
|
260
|
94
|
||||||
|
Distributions by subsidiaries to non-controlling interests
|
(160
|
)
|
(319
|
)
|
||||
|
Interest paid
|
(1,397
|
)
|
(1,077
|
)
|
||||
|
Payments made to acquire non-controlling interests
|
(1,117
|
)
|
-
|
|||||
|
Repayments of lease liabilities
|
(2,375
|
)
|
(440
|
)
|
||||
|
Proceeds from other financing activities
|
276
|
-
|
||||||
|
Net cash used in financing activities
|
97,584
|
29,369
|
||||||
|
Net increase/ (decrease) in cash and cash equivalents
|
14,934
|
(10,822
|
)
|
|||||
|
Cash and cash equivalents at 1 January
|
60,313
|
111,922
|
||||||
|
Effect of foreign currency exchange rate changes
|
553
|
(340
|
)
|
|||||
|
Cash and cash equivalents at 31 March
|
75,800
|
100,760
|
||||||
30
Note to consolidated statement of Cash Flows
for the three-month period ended 31 March 2020
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 2020
|
Three-month period ended 31 March 2019
|
||||||
|
Operating activities
|
||||||||
|
Profit before taxation
|
(27,814
|
)
|
24,798
|
|||||
|
Adjustments for:
|
||||||||
|
Depreciation, depletion and amortisation
|
25,070
|
25,998
|
||||||
|
Dry hole costs written off
|
1,863
|
1,836
|
||||||
|
Share of profits from associates and joint ventures
|
(472
|
)
|
(2,232
|
)
|
||||
|
Investment income
|
(29
|
)
|
(55
|
)
|
||||
|
Interest income
|
(689
|
)
|
(1,924
|
)
|
||||
|
Interest expense
|
3,683
|
4,301
|
||||||
|
Gain/(loss) on foreign currency exchange rate changes and derivative financial instruments
|
(8,589
|
)
|
1,295
|
|||||
|
Gain/(loss) on disposal of property, plant, equipment and other non-current assets, net
|
(3
|
)
|
85
|
|||||
|
Impairment reversal on assets
|
10,360
|
(136
|
)
|
|||||
|
Credit impairment losses
|
(5
|
)
|
19
|
|||||
|
Operating profit before change of operating capital
|
3,375
|
53,985
|
||||||
|
Accounts receivable and other current assets
|
(48,286
|
)
|
(7,199
|
)
|
||||
|
Inventories
|
(1,163
|
)
|
(30,127
|
)
|
||||
|
Accounts payable and other current liabilities
|
(16,994
|
)
|
(24,314
|
)
|
||||
|
Subtotal
|
(63,068
|
)
|
(7,655
|
)
|
||||
|
Income tax paid
|
(5,057
|
)
|
(6,954
|
)
|
||||
|
Net cash generated from operating activities
|
(68,125
|
)
|
(14,609
|
)
|
||||
31
Segment Reporting
for the three-month period ended 31 March 2020
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
|
Items
|
Three-month period ended 31 March 2020
|
Three-month period ended 31 March 2019
|
||||||
|
Turnover
|
||||||||
|
Exploration and production
|
||||||||
|
External sales
|
26,944
|
29,367
|
||||||
|
Inter-segment sales
|
18,238
|
22,089
|
||||||
|
Subtotal
|
45,182
|
51,456
|
||||||
|
Refining
|
||||||||
|
External sales
|
25,145
|
34,002
|
||||||
|
Inter-segment sales
|
217,468
|
255,752
|
||||||
|
Subtotal
|
242,613
|
289,754
|
||||||
|
Marketing and distribution
|
||||||||
|
External sales
|
248,725
|
321,636
|
||||||
|
Inter-segment sales
|
1,226
|
965
|
||||||
|
Subtotal
|
249,951
|
322,601
|
||||||
|
Chemicals
|
||||||||
|
External sales
|
71,815
|
110,990
|
||||||
|
Inter-segment sales
|
10,884
|
17,121
|
||||||
|
Subtotal
|
82,699
|
128,111
|
||||||
|
Corporate and others
|
||||||||
|
External sales
|
170,003
|
205,504
|
||||||
|
Inter-segment sales
|
131,839
|
154,677
|
||||||
|
Subtotal
|
301,842
|
360,181
|
||||||
|
Elimination of inter-segment sales
|
(379,655
|
)
|
(450,604
|
)
|
||||
|
Turnover
|
542,632
|
701,499
|
||||||
|
Other operating revenues
|
||||||||
|
Exploration and production
|
1,272
|
1,821
|
||||||
|
Refining
|
932
|
1,251
|
||||||
|
Marketing and distribution
|
6,939
|
8,850
|
||||||
|
Chemicals
|
3,401
|
3,733
|
||||||
|
Corporate and others
|
326
|
425
|
||||||
|
Other operating revenues
|
12,870
|
16,080
|
||||||
|
Turnover and other operating revenues
|
555,502
|
717,579
|
||||||
|
Result
|
||||||||
|
Operating (loss)/profit
|
||||||||
32
Segment Reporting (Continued)
|
By segment
|
||||||||
|
Exploration and production
|
1,518
|
2,143
|
||||||
|
Refining
|
(25,794
|
)
|
11,963
|
|||||
|
Marketing and distribution
|
(1,536
|
)
|
7,866
|
|||||
|
Chemicals
|
(1,568
|
)
|
6,953
|
|||||
|
Corporate and others
|
1,075
|
(3,544
|
)
|
|||||
|
Elimination
|
-
|
(540
|
)
|
|||||
|
Total segment operating profit
|
(26,305
|
)
|
24,841
|
|||||
|
Share of profits from associates and joint ventures
|
||||||||
|
Exploration and production
|
476
|
777
|
||||||
|
Refining
|
(682
|
)
|
(404
|
)
|
||||
|
Marketing and distribution
|
287
|
247
|
||||||
|
Chemicals
|
(76
|
)
|
1,061
|
|||||
|
Corporate and others
|
467
|
551
|
||||||
|
Aggregate share of profits from associates and joint ventures
|
472
|
2,232
|
||||||
|
Investment income/(losses)
|
||||||||
|
Exploration and production
|
-
|
(1
|
)
|
|||||
|
Refining
|
2
|
10
|
||||||
|
Marketing and distribution
|
14
|
45
|
||||||
|
Chemicals
|
8
|
1
|
||||||
|
Corporate and others
|
5
|
-
|
||||||
|
Aggregate investment income
|
29
|
55
|
||||||
|
Net finance costs
|
(2,010
|
)
|
(2,330
|
)
|
||||
|
Profit before taxation
|
(27,814
|
)
|
24,798
|
|||||
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.
33
(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
|
Three-month period ended 31 March 2020
|
Three-month period ended 31 March 2019
|
||||||
|
Net profit under CASs
|
(21,032
|
)
|
18,471
|
|||||
|
Adjustments:
|
||||||||
|
Government grants (i)
|
12
|
13
|
||||||
|
Safety production fund (ii)
|
735
|
775
|
||||||
|
Profit for the period under IFRS
|
(20,285
|
)
|
19,259
|
|||||
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 31 March 2020
|
At 31 December 2019
|
||||||
|
Shareholders’ equity under CASs
|
847,666
|
876,905
|
||||||
|
Adjustments:
|
||||||||
|
Government grants(i)
|
(1,058
|
)
|
(1,070
|
)
|
||||
|
Total equity under IFRS
|
846,608
|
875,835
|
||||||
34
Document 2
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)
Connected Transaction
Absorption and Merger of Zhanjiang Dongxing
|
ABSORPTION AND MERGER
The Board is pleased to announce that on 29 April 2020, Zhongke Refining, a wholly-owned subsidiary of the Company, entered into the Merger Agreement
with Zhanjiang Dongxing, and the Company entered into the Joint Venture Contract with Century Bright Company. Pursuant to the Transaction Documents, Zhongke Refining agreed to absorb and merge Zhanjiang Dongxing. Upon the Completion of
the Absorption and Merger, Zhongke Refining will become the owner of all assets and liabilities of Zhanjiang Dongxing and will assume the existing businesses and personnel of Zhanjiang Dongxing. The Company and Century Bright Company will
hold 90.3% and 9.7% equity interest in Zhongke Refining, respectively.
LISTING RULES IMPLICATIONS
As at the date of this announcement, China Petrochemical Corporation is the controlling shareholder of the Company. As Century Bright Company, a
wholly-owned subsidiary of China Petrochemical Corporation, holds more than 10% equity interest in Zhanjiang Dongxing (a subsidiary of the Company), pursuant to Chapter 14A of the Listing Rules, Zhanjiang Dongxing is a connected
subsidiary of the Company. As the highest applicable percentage ratio in respect of the Absorption and Merger exceeds 0.1% but falls below 5%, the Absorption and Merger is subject to the reporting and announcement requirements, but exempt
from the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules.
|
1
INTRODUCTION
The Board is pleased to announce that on 29 April 2020, Zhongke Refining, a wholly-owned subsidiary of the Company, entered into the
Merger Agreement with Zhanjiang Dongxing, and the Company entered into the Joint Venture Contract with Century Bright Company. Pursuant to the Transaction Documents, Zhongke Refining agreed to absorb and merge Zhanjiang Dongxing. Upon the
Completion of the Absorption and Merger, Zhongke Refining will become the owner of all assets and liabilities of Zhanjiang Dongxing and will assume the existing businesses and personnel of Zhanjiang Dongxing. The Company and Century Bright
Company will hold 90.3% and 9.7% equity interest in Zhongke Refining, respectively.
PRINCIPAL TERMS OF THE MERGER AGREEMENT
Date: 29 April 2020
Parties:
| 1) |
Zhongke Refining (as the merging party); and
|
| 2) |
Zhanjiang Dongxing (as the the merged party)
|
Current Status of Zhongke Refining and Zhanjiang Dongxing
|
Registered Capital
|
Shareholder(s)
|
|
|
Zhongke Refining
|
RMB 2,000,000,000
|
Sinopec Corp.
|
|
Zhanjiang Dongxing
|
RMB 4,396,641,600
|
Sinopec Corp. holds 75% interest and Century Bright Company holds 25% interest
|
Basic Information on the Surviving Company after the Absorption and Merger
| 1. |
Form of the merger: Absorption and merger. After the Absorption and Merger, Zhongke Refining will be the surviving company, while Zhanjiang Dongxing will be dissolved.
|
2
| 2. |
Registered capital after the Absorption and Merger: RMB 6,396,641,600.
|
| 3. |
Shareholders information: There will be two shareholders after the Absorption and Merger. The capital contribution subscribed for by Sinopec Corp. will be RMB
5,776,167,400, representing 90.3% of the registered capital. The capital contribution subscribed for by Century Bright Company will be RMB 620,474,200, representing 9.7% of the registered capital.
|
Succession Arrangement of Relevant Creditor’s Rights and Debts
All existing debts of Zhanjiang Dongxing shall be assumed by Zhongke Refining and the creditor’s rights shall be enjoyed by Zhongke
Refining. Zhanjiang Dongxing will not conduct property liquidation.
The obligation of notifying creditors and debtors in connection with the Absorption and Merger will be carried out in accordance with
relevant provisions of the PRC Company Law.
Absorption and Merger Procedures
In order to approve the Merger Agreement, Zhanjiang Dongxing shall hold a board meeting in accordance with its articles of association to
pass a board resolution and Zhongke Refining’s shareholder shall make a shareholder’s decision. Upon the approval of the Merger Agreement, Zhongke Refining shall perform the amendment registration procedures with the registration authority to
complete the Absorption and Merger. Zhanjiang Dongxing shall perform the dissolving procedure with the registration authority.
3
SHAREHOLDING STRUCTURE OF THE RELEVANT PARTIES BEFORE AND AFTER THE COMPLETION OF THE ABSORPTION AND MERGER
PRINCIPAL TERMS OF THE JOINT VENTURE CONTRACT
Date: 29 April 2020
Parties:
| 1) |
the Company
|
| 2) |
Century Bright Company
|
Business scope of the Joint Venture:
Petroleum refining; petrochemical products and industrial gas production, sales, warehousing and transportation supporting services; construction management of refining and chemical project; automobile, railway loading and unloading and pipeline
transportation of petrochemical products and raw and auxiliary materials; tank truck cleaning; docks and other ports facility operation; cargo handling, warehousing, logistics services in the port area; simple processing of the cargo and its
packaging; provision of shore power and fresh water supply services for ships; provision of pollutants (contaminated oil water, residual oil, washing tank water, domestic sewage and garbage) receiving services; providing oil containment boom
deployment services for ships; providing pushing and towing services for ships entering and leaving ports, docking and berthing, and mooring; research and development of petrochemical products and technologies, and its application consulting;
supply and sales of water, electricity, wind and steam transportation energy; leasing of machinery and equipment facilities; leasing of proprietary property; information consulting services (except securities and futures investment, education and
training consulting and other consulting services subject to pre-approval and franchise special control). Prepare the following projects (business activities of the following projects shall not be engaged in during the preparation period):
provision of terminal security services, and operating hazardous goods at the terminal.
4
Registered Capital and Contribution
The Company and Century Bright Company agreed to invest all of their respective owner’s equity in Zhongke Refining and Zhanjiang Dongxing
into the Joint Venture. Based on the factors such as the operating profit and loss of Zhanjiang Dongxing and the capital contribution of the Company to be injected into Zhongke Refining prior to the Completion of the Absorption and Merger, the
Company and Century Bright Company agreed to hold 90.3% and 9.7% equity interest in the Joint Venture, respectively, after the Absorption and Merger. The registered capital of the Joint Venture shall be RMB 6,396,641,600. At the Completion of the
Absorption and Merger, if the value of the assets to be contributed by the Company or Century Bright Company does not satisfy that the Company and Century Bright Company holds 90.3% and 9.7% equity interest in the Joint Venture, respectively,
then such shareholder shall make payment in cash to cover such shortfall.
The assets of the Joint Venture shall be determined based on the valuation report issued by the assets appraisal agency which shall be
prepared based on the audited asset figures. If either the Company or Century Bright Company plans to dispose of its equity interest or its registered capital subscribed for through mortgage, pledge, lien or other disposal actions in any form,
such disposal shall be subject to the written consent of the other party.
Equity Transfer
| 1. |
When either party desires to transfer, sell or otherwise dispose of its equity interest in Joint Venture, the other party may exercise its right of first refusal in
accordance with the Joint Venture Contract. The transfer price shall be determined based on the valuation results issued by a qualified appraisal agency engaged by the parties and shall not violate the mandatory provisions of laws and
regulations relating to the transfer of state-owned equity.
|
| 2. |
Notwithstanding the foregoing, neither party may exercise the right of first refusal in connection with the transfer of equity interest by the other party to its
related parties including its wholly-owned subsidiaries or parent company, provided that the transferor provides written documents acceptable to the other party evidencing that the transferee of the equity interest is able to perform
the obligations under the Joint Venture Contract and other relevant agreements in place of the transferor.
|
| 3. |
Neither party shall donate its equity interest in the Joint Venture to a third party or pledge its equity interest in the Joint Venture to the Joint Venture. If any
party intends to create pledge security interest over its equity interest in the Joint Venture to creditors other than shareholders of Joint Venture, it shall obtain consent of both shareholders.
|
5
Directors: The Joint Venture shall have an
executive director, who shall be responsible for the shareholders’ general meeting of the Joint Venture.
BASIS FOR DETERMINING THE SHAREHOLDING RATIO OF THE COMPANY AND CENTURY BRIGHT COMPANY IN JOINT VENTURE AFTER THE
ABSORPTION AND MERGER
The respective adjusted shareholding ratio of the Company and Century Bright Company in Joint Venture was determined with reference to (i)
each of the valuation results of the net assets of Zhongke Refining and Zhanjiang Dongxing as sets out in the valuation report of Zhongke Refining and Zhanjiang Dongxing, respectively, prepared by the independent Valuer using the asset-based
approach. Taking 31 December 2019 as the Valuation Date, the appraised value of the net assets of Zhanjiang Dongxing was RMB 9.390 billion, and the appraised value of the net assets of Zhongke Refining was RMB 13.493 billion (subject to the final
valuation results in the filing record); (ii) the respective interest percentage of the Company and Century Bright Company in Zhongke Refining and Zhanjiang Dongxing prior to the Completion of the Absorption and Merger; (iii) the capital
contributions of the Company to Zhongke Refining and Zhanjiang Dongxing and the profit and loss from the going concerns, from the Valuation Date to the Completion of the Absorption and Merger. At the Completion of the Absorption and Merger, after
taking into account the above factors, if the value of the assets to be contributed by certain shareholder does not satisfy the respective adjusted equity interest of the Company and Century Bright Company in Joint Venture (i.e. the approximate
90.3% and 9.7% equity interest in Joint Venture, respectively held by the Company and Century Bright Company), such shareholder shall make payment in cash to cover such shortfall.
REASONS FOR AND BENEFITS OF THE ABSORPTION AND MERGER
The Absorption and Merger will help improve the integrated operation of the Company, optimise the allocation of regional resources so as
to enhance the comprehensive competitiveness of the Company in its business locations, and will help reduce the connected transactions of the Company.
6
FINANCIAL INFORMATION ON THE RELEVANT PARTIES
Zhanjiang Dongxing
Zhanjiang Dongxing is a limited liability company incorporated under the laws of the PRC. Prior to the Completion of the Absorption and
Merger, according to the articles of association of Zhanjiang Dongxing, the Company holds 75% interest in Zhanjiang Dongxing, and China Petrochemical Corporation holds 25% interest in Zhanjiang Dongxing through Century Bright Company. It is
principally engaged in sales and transportation supporting services of refined oil products.
The table below sets out certain audited financial information of Zhanjiang Dongxing for the two financial years ended 31 December 2018
and 31 December 2019 prepared under the China Accounting Standards for Business Enterprises:
Unit: RMB
|
As at 31
December 2018
|
As at 31
December 2019
|
|||||||
|
Total assets
|
11,236,712,528.35
|
11,497,470,053.45
|
||||||
|
Net assets
|
6,796,049,776.69
|
7,049,468,565.74
|
||||||
|
For the year ended 31 December 2018
|
For the year ended 31 December 2019
|
|||||||
|
Revenue
|
29,105,008,939.38
|
23,288,525,195.37
|
||||||
|
Profit before income tax expense
|
2,144,354,460.37
|
1,160,384,137.93
|
||||||
|
Profit after income tax expense
|
1,608,219,134.42
|
870,135,042.51
|
||||||
Upon the Completion of the Absorption and Merger, the legal person status of Zhanjiang Dongxing will be dissolved.
7
Zhongke Refining
Zhongke Refining is a limited liability company incorporated under the laws of the PRC. Prior to the Completion of the Absorption and
Merger, the Company holds 100% equity interest in Zhongke Refining. Currently, Zhongke integrated refining and petrochemical project is still under construction and has not been put into operation. Zhongke Refining is principally engaged in oil
refining, production, sales, storage and transportation supporting services of petrochemical products and industrial gases.
The table below sets out certain audited financial information of Zhongke Refining for the two financial years ended 31 December 2018 and
31 December 2019 prepared under the China Accounting Standards for Business Enterprises:
Unit: RMB
|
As at 31
December 2018
|
As at 31
December 2019
|
|||||||
|
Total assets
|
19,264,497,773.62
|
32,927,235,505.42
|
||||||
|
Net assets
|
5,893,043,000.00
|
10,784,540,300.00
|
||||||
|
For the year ended 31 December 2018
|
For the year ended 31 December 2019
|
|||||||
|
Revenue
|
0
|
0
|
||||||
|
Profit before income tax expense
|
0
|
0
|
||||||
|
Profit after income tax expense
|
0
|
0
|
||||||
Upon the Completion of the Absorption and Merger, Zhongke Refining will remain a subsidiary of the Company.
8
OPINIONS OF THE DIRECTORS
As at the date of this announcement, except for the INEDs, all other Directors are connected Directors and therefore required to abstain
from voting on the resolution approving the Transaction Documents and the transactions contemplated thereunder at the Board meeting. The Board has considered and approved the resolution on the Absorption and Merger. All Directors (including all
INEDs) are of the view that, (i) the Absorption and Merger is on normal commercial terms; (ii) the terms and conditions of the Transaction Documents are fair and reasonable; and (iii) the Absorption and Merger is in the interest of the Company
and its shareholders as a whole.
LISTING RULES IMPLICATIONS
As at the date of this announcement, China Petrochemical Corporation is the controlling shareholder of the Company. As Century Bright
Company, a wholly-owned subsidiary of China Petrochemical Corporation, holds more than 10% equity interest in Zhanjiang Dongxing (a subsidiary of the Company), pursuant to Chapter 14A of the Listing Rules, Zhanjiang Dongxing is a connected
subsidiary of the Company. As the highest applicable percentage ratio in respect of the Absorption and Merger exceeds 0.1% but falls below 5%, the Absorption and Merger is subject to the reporting and announcement requirements, but exempt from
the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules.
The Absorption and Merger constitutes a related party transaction of the Company with China Petrochemical Corporation under the Rules
Governing the Listing of Stocks on Shanghai Stock Exchange, but does not reach the threshold of disclosure under Chapter 10 of the Rules Governing the Listing of Stocks on Shanghai Stock Exchange, and is not subject to the consideration of the
general meeting of the Company.
INFORMATION ON THE OTHER PARTIES
The Company
The Company is one of the largest integrated energy and chemical companies in China and is mainly engaged in the exploration and
production, pipeline transportation and sale of petroleum and natural gas; the production, sale, storage and transportation of refinery products, petrochemical products, coal chemical products, synthetic fibre and other chemical products; the
import and export, including import and export agency business, of petroleum, natural gas, petroleum products, petrochemical and chemical products, and other commodities and technologies; and research, development and application of technologies
and information.
9
Century Bright Company
Century Bright Company is a limited liability company incorporated under the laws of the Hong Kong. It mainly engages in relevant
businesses as the overseas fund platform of China Petrochemical Corporation and is an overseas financing center, settlement center, foreign exchange center, cash management center and fund monitoring center of China Petrochemical Corporation.
China Petrochemical Corporation directly holds 100% equity interest in Century Bright Company.
DEFINITIONS
In this announcement, unless the context requires otherwise, the following terms shall have the meanings set out below:
|
“Absorption and Merger”
|
the absorption and merger of Zhanjiang Dongxing by Zhongke Refining in accordance with the Merger Agreement and the Joint Venture Contract, upon the
completion of which, the Company and Century Bright Company will hold 90.3% and 9.7% equity interest in the Joint Venture, respectively
|
|
|
“Board”
|
the board of directors of the Company
|
|
|
“Century Bright Company”
|
Sinopec Century Bright Capital Investment Limited, a wholly-owned subsidiary of China Petrochemical Corporation
|
|
|
“China” or “PRC”
|
the People’s Republic of China
|
|
|
“China Petrochemical Corporation”
|
China Petrochemical Corporation
|
|
|
“Company” or “Sinopec Corp.”
|
China Petroleum & Chemical Corporation
|
|
|
“Completion”
|
the completion of the Absorption and Merger in accordance with the Merger Agreement
|
10
|
“connected person(s)”
|
has the meaning ascribed thereto under the Listing Rules
|
|
|
“Director(s)”
|
director(s) of the Company
|
|
|
“INED(s)”
|
the independent non-executive directors of the Company, including Tang Min, Fan Gang, Cai Hongbin and Ng, Kar Ling Johnny
|
|
|
“Joint Venture”
|
the joint venture, namely Zhongke Refining, after the Completion of the Absorption and Merger
|
|
|
“Joint Venture Contract”
|
the Equity Joint Venture Contract dated 29 April 2020 entered into between the Company and Century Bright Company
|
|
|
“Listing Rules”
|
the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
|
|
|
“Merger Agreement”
|
the agreement dated 29 April 2020 entered into between Zhongke Refining and Zhanjiang Dongxing on the absorption and merger of Zhanjiang Dongxing by
Zhongke Refining
|
|
|
“RMB”
|
Renminbi, the lawful currency of the PRC
|
|
|
“Stock Exchange”
|
The Stock Exchange of Hong Kong Limited
|
|
|
“Transaction Documents”
|
The Merger Agreement and the Joint Venture Contract
|
|
|
“Valuer”
|
China United Asset Appraisal Group Co., Ltd.
|
11
|
“Valuation Date”
|
31 December 2019
|
|
|
“Zhanjiang Dongxing”
|
Sinopec Zhanjiang Dongxing Petrochemical Company Limited
|
|
|
“Zhongke Refining”
|
Zhongke (Guangdong) Refining and Petrochemical Co., Ltd.
|
|
By Order of the Board
China Petroleum & Chemical Corporation
Huang Wensheng
Vice President and Secretary to the Board
|
Beijing, the PRC,
29 April 2020
As of the date of this announcement, directors of
the Company are: Zhang Yuzhuo*, Ma Yongsheng#, Yu Baocai*, Ling Yiqun#, Li Yong*, Tang Min+, Fan Gang+, Cai Hongbin+, Ng, Kar Ling Johnny+
# Executive Director
* Non-executive Director
+ Independent
Non-executive Director
12
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
China Petroleum & Chemical Corporation
By: /s/ Huang Wensheng
Name: Huang Wensheng
Title: Vice President and Secretary to the Board of Directors
Date: April 29, 2020