6-K
CHINA PETROLEUM & CHEMICAL CORP (SNPMF)
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 2023
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.)
Form 20-F ✔ Form 40-F _____
(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.)
Yes ____ No ✔
(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:
An announcement regarding first quarterly report for 2023 of China Petroleum & Chemical Corporation (the “Registrant”), made by the Registrant on April 27, 2023.
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 2023
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).
| By Order of the Board |
|---|
| China Petroleum & Chemical Corporation |
| Huang Wensheng |
| Vice President and Secretary to the Board of Directors |
Beijing, the PRC,
27 April 2023
As of the date of this announcement, directors of the Company are: Ma Yongsheng*, Zhao Dong*, Yu Baocai#, Li Yonglin#, Liu Hongbin#, Cai Hongbin+, Ng, Kar Ling Johnny+, Shi Dan+ and Bi Mingjian+.
| # | Executive Director |
|---|---|
| * | Non-executive Director |
| --- | --- |
| + | Independent Non-executive Director |
| --- | --- |
China Petroleum & Chemical Corporation The First Quarterly Report for 2023
27 April 2023 Beijing, China
Important notice
| ● | The Board of Directors, the Board of Supervisors of China Petroleum & Chemical Corporation (“Sinopec Corp.” or “the Company”) and its directors, supervisors and senior<br> management warrant the authenticity, accuracy and completeness of the information contained in this quarterly report and there are no false representations, misleading statements or material omissions and severally and jointly accept full<br> responsibility. |
|---|---|
| ● | This first quarterly report for 2023 was approved at the 16^th^ meeting of the Eighth Session of the Board of Directors of Sinopec Corp. All directors attended this<br> meeting. |
| --- | --- |
| ● | Mr. Ma Yongsheng, Chairman, Mr. Yu Baocai, President, Ms. Shou Donghua, Chief Financial Officer and Head of the Financial Department of Sinopec Corp. warrant the authenticity,<br> accuracy and completeness of the financial statements contained in this quarterly report. |
| --- | --- |
| ● | The financial statements in this quarterly report were not audited. |
| --- | --- |
2
| 1. | Principal financial data |
|---|---|
| 1.1 | Principal financial data and indicators |
| --- | --- |
| 1.1.1 | Principal financial data and indicators prepared in accordance with China Accounting Standards for Business Enterprises (CASs) |
| --- | --- |
RMB million
| Items | As of 31 March 2023 | As of 31 December 2022 (before adjustment) | As of 31 December 2022 (adjusted) | Change (%) |
|---|---|---|---|---|
| Total assets | 2,011,153 | 1,948,640 | 1,951,121 | 3.08 |
| Total equity attributable to equity shareholders of the Company | 806,963 | 785,577 | 788,471 | 2.35 |
RMB million
| Three-month period ended 31 March 2023 | Three-month period ended 31 March 2022 (before adjustment) | Three-month period ended 31 March 2022 (adjusted) | Change (%) | |
|---|---|---|---|---|
| Operating income | 791,331 | 771,386 | 771,386 | 2.59 |
| Net profit attributable to equity shareholders of the Company | 20,102 | 22,605 | 22,800 | (11.83) |
| Net profit attributable to equity shareholders of the Company excluding extraordinary gains and losses | 19,716 | 22,450 | 22,645 | (12.93) |
| Net cash flow used in operating activities | (18,397) | (46,781) | (46,781) | - |
| Basic earnings per share (RMB) | 0.168 | 0.187 | 0.188 | (10.64) |
| Diluted earnings per share (RMB) | 0.168 | 0.187 | 0.188 | (10.64) |
| Weighted average return on net assets (%) | 2.52 | 2.88 | 2.90 | (0.38) percentage points |
Note: In accordance with the requirements of both the Interpretation of Accounting Standards for Business Enterprises No. 16 and the Accounting Standard for Business Enterprises No. 18—Income Taxes, the Company retrospectively adjusted the relevant items of the financial statements.
| 1.1.2 | Extraordinary items |
|---|
RMB million
| Extraordinary items | Three-month period ended 31 March 2023 |
|---|---|
| (income)/expenses | |
| Net gain on disposal of non-current assets | (78) |
| Donations | 4 |
| Government grants | (676) |
| Gains on holding and disposal of various investments | (181) |
| Other extraordinary expenses, net | 257 |
| Subtotal | (674) |
| Tax effect | 182 |
| Total | (492) |
| Attributable to: | |
| Equity shareholders of the Company | (386) |
| Minority interests | (106) |
3
| 1.1.3 | Principal financial data and indicators prepared in accordance with International Financial Reporting Standards (IFRS) |
|---|
RMB million
| Items | As of 31 March 2023 | As of 31 December 2022 (before adjustment) | As of 31 December 2022 (adjusted) | Change (%) |
|---|---|---|---|---|
| Total assets | 2,011,153 | 1,948,640 | 1,951,121 | 3.08 |
| Total equity attributable to shareholders of the Company | 806,099 | 784,706 | 787,600 | 2.35 |
RMB: million
| Three-month period ended 31 March 2023 | Three-month period ended 31 March 2022 (before adjustment) | Three-month period ended 31 March 2022 (adjusted) | Change (%) | |
|---|---|---|---|---|
| Revenue | 791,331 | 771,386 | 771,386 | 2.59 |
| Operating profit | 31,090 | 32,960 | 32,960 | (5.67) |
| Net profit attributable to shareholders of the Company | 20,740 | 23,338 | 23,533 | (11.87) |
| Net cash flow used in operating activities | (18,397) | (46,781) | (46,781) | - |
| Basic earnings per share (RMB) | 0.173 | 0.193 | 0.194 | (10.82) |
| Diluted earnings per share (RMB) | 0.173 | 0.193 | 0.194 | (10.82) |
| Return on net assets (%) | 2.57 | 2.94 | 2.96 | (0.39) percentage points |
Note: In accordance with the requirements of the International Accounting Standards 12, the Company retrospectively adjusted the relevant items of the financial statements.
| 1.2 | Significant changes in major items contained in the consolidated financial statements prepared in accordance with CASs. | ||||
|---|---|---|---|---|---|
| Items of Consolidated Balance Sheet | As of 31 March 2023 | As of 31 December 2022 | Increase/(Decrease) | Main reasons for changes | |
| --- | --- | --- | --- | --- | --- |
| Amount | Percentage | ||||
| RMB million | RMB million | RMB million | （%） | ||
| Accounts receivable | 70,122 | 46,364 | 23,758 | 51.24 | Increase in receivables of crude oil trading. |
| Prepayments | 10,662 | 7,956 | 2,706 | 34.01 | Increase in prepayments of crude oil procurement. |
| Short-term loans | 84,983 | 21,313 | 63,670 | 298.74 | Increase in short-term loans for supplement of liquidity. |
| Long-term loans | 129,943 | 94,964 | 34,979 | 36.83 | Increase in long-term loans to fund capital expenditures. |
4
| Items of Consolidated Balance Sheet | As of 31 March 2023 | As of 31 December 2022 | Increase/(Decrease) | Main reasons for changes | |
|---|---|---|---|---|---|
| Amount | Percentage | ||||
| RMB million | RMB million | RMB million | （%） | ||
| Other comprehensive income | 799 | 3,072 | (2,273) | (73.99) | Impact of changes in the translation difference and gains and losses of hedging business. |
| Items of Consolidated Income Statement | For three-month period ended 31 March | Increase/(Decrease) | Main reasons for changes | ||
| --- | --- | --- | --- | --- | --- |
| 2023 | 2022 | Amount | Percentage | ||
| RMB Million | RMB Million | RMB Million | （%） | ||
| Other income | 1,977 | 492 | 1,485 | 301.83 | Increase in the refund of value-added tax. |
| Investment income/(loss) | 1,493 | (1,662) | 3,155 | - | Decrease in investment income of associates and joint ventures and the impact of gains and losses of derivative financial<br> instruments. |
| (Losses) from changes in fair value | (244) | (6,937) | 6,693 | - | Impact of floating gains and losses of derivative financial instruments |
| Items of Consolidated Cash Flow Statement | For three-month period ended 31 March | Increase/(Decrease) | Main reasons for changes | ||
| --- | --- | --- | --- | --- | --- |
| 2023 | 2022 | Amount | Percentage | ||
| RMB million | RMB million | RMB million | （%） | ||
| Payments of taxes and levies | (73,344) | (122,520) | (49,176) | - | The taxes deferred from the fourth quarter of<br> 2021 was paid in the first quarter of previous year, and no such matter in reporting period. |
| Cash received from returns on investments | 407 | 1,095 | (688) | (62.83) | Decreased in cash dividends received from joint ventures year- on-year. |
| Other cash received relating to investing activities | 5,995 | 14,689 | (8,694) | (59.19) | Impact of change in time deposits with maturities over three months. |
| Other cash paid relating to investing activities | (27,824) | (10,831) | 16,993 | - | |
| Cash paid for acquisition of investments | (2,334) | (5,946) | (3,612) | - | Decreased in capital injection paid for subsidiaries year-on-year. |
| Net cash paid for the acquisition of subsidiaries and other business entities | - | (1,562) | (1,562) | - | The balance of asset acquisition was paid in the same time period last year, and no such matter in reporting period. |
5
| Items of Consolidated Cash Flow Statement | For three-month period ended 31 March | Increase/(Decrease) | Main reasons for changes | ||
|---|---|---|---|---|---|
| 2023 | 2022 | Amount | Percentage | ||
| RMB million | RMB million | RMB million | （%） | ||
| Cash received from capital contributions | 88 | 779 | (691) | (88.70) | Decreased in capital injection received from minority shareholders year-on-year. |
| Cash received from borrowings | 228,360 | 138,034 | 90,326 | 65.44 | Increase in borrowings for supplement of liquidity and project funds. |
| Cash repayments of borrowings | (139,146) | (73,648) | 65,498 | - | Due to the increase of matured borrowings |
| 2. | Shareholders information | ||||
| --- | --- |
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 428,736, including 423,202 holders of domestic A shares and 5,534 holders of overseas<br> 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 | 80,572,167,393 | 67.20 | 0 | State-owned share |
| HKSCC (Nominees) Limited | 24,635,678,771 | 20.55 | Unknown | H share |
| 中国证券金融股份有限公司 | 2,325,374,407 | 1.94 | 0 | A share |
| 中国石油天然气集团有限公司 | 2,165,749,530 | 1.81 | 0 | A share |
| 香港中央结算有限公司 | 1,354,513,995 | 1.13 | 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 | 365,490,965 | 0.30 | 0 | A share |
| 中央汇金资产管理有限责任公司 | 315,223,600 | 0.26 | 0 | A share |
| 国信证券股份有限公司 | 235,109,414 | 0.20 | 0 | A share |
| 中国工商银行－上证 50 交易型开放式指数证券投资基金 | 105,367,876 | 0.09 | 0 | A share |
| 谌贺飞 | 93,611,700 | 0.08 | 0 | A share |
Note: Sinopec Century Bright Capital Investment Limited, overseas wholly-owned subsidiary of China Petrochemical Corporation, holds 767,916,000 H shares, accounting for 0.64% of the total issued share capital of Sinopec Corp. Those shareholdings were 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: Sinopec Corp. is not aware of any connected relationship or acting in concert among or between the above-mentioned top ten shareholders.
6
| 3. | Review of operating results |
|---|
In the first quarter of 2023, China’s economy improved with gross domestic product (GDP) up by 4.5% year on year. The international crude oil prices fluctuated in a wide range and the spot price of Platt’s Brent for the first quarter averaged USD81.27 per barrel, down by 19.7% year on year. The domestic demand for refined oil products rebounded rapidly, demand for natural gas maintained growth year on year, and demand for chemical products recovered.
The Company seized the favorable market opportunity, optimized the whole business chain, strengthened the coordination of production and marketing, made great efforts to expand sales, and achieved good performance. In accordance with CASs, net profit attributable to equity shareholders of the Company was RMB 20.102 billion in the first quarter of 2023. In accordance with IFRS, net profit attributable to shareholders of the Company was RMB 20.740 billion in the first quarter of 2023.
Exploration and Production: The Company intensified efforts in high quality exploration, expanded the scale of profitable production capacity, and made positive progress in maintaining oil production, increasing gas output and reducing cost. In exploration, we focused on expanding resources, increasing reserve and obtaining more exploration licenses, strengthened risk exploration in new regions and areas, and made important breakthroughs of oil and gas exploration in Shunbei, Chuanbei, and Jiyang depression. In development, we accelerated the capacity building of Shunbei and Tahe oilfields, strengthened fine-tuned development of mature oil fields, and sped up capacity building of natural gas in Western Sichuan and Southeast Sichuan. We also optimized the resources structure of LNG to reduce procurement costs, strengthened operation optimization of natural gas business, achieving a constant improvement in the profitability of whole natural gas business chain. In the first quarter, the Company’s oil and gas production reached 124.6 million barrels of oil equivalent, up by 2.6% year on year, with natural gas production reaching 330.47 billion cubic feet, up by 5.3% year on year. The exploration and production segment realised an earnings before interest and tax (EBIT) of RMB 13.357 billion.
| Exploration and Production | Unit | Three-month period ended 31 March | Changes | |
|---|---|---|---|---|
| 2023 | 2022 | (%) | ||
| Oil and gas production | million boe | 124.60 | 121.41 | 2.6 |
| Crude oil production | million barrels | 69.49 | 69.07 | 0.6 |
| China | million barrels | 61.86 | 61.60 | 0.4 |
| Overseas | million barrels | 7.63 | 7.47 | 2.1 |
| Natural gas production | billion cubic feet | 330.47 | 313.94 | 5.3 |
| Realised crude oil price | USD/barrel | 75.21 | 89.02 | (15.5) |
| Realised natural gas price | USD/thousand cubic feet | 8.70 | 8.14 | 6.9 |
Conversion:
For domestic production of crude oil, 1 tonne = 7.10 barrels. For overseas production of crude oil, 1 tonne = 7.25 barrels. For production of natural gas, 1 cubic meter = 35.31 cubic feet.
Refining: The Company actively addressed the market changes, vigorously optimized production operation to maximize the overall profits along the business chain. Closely following market changes,
7
we maintained high utilisation rate. We flexibly adjusted the procurement strategies to reduce procurement costs. We optimized the product mix and increased the exports of refined oil products. We also accelerated the construction of world-class refining bases and advanced with structural adjustment projects in an orderly manner. In the first quarter, the Company processed 62.24 million tonnes of crude oil, yielding 37.30 million tonnes of refined oil products. The refining segment realised EBIT of RMB 10.459 billion.
| Refining | Unit | Three-month period ended 31 March | Changes (%) | |
|---|---|---|---|---|
| 2023 | 2022 | |||
| Refinery throughput | million tonnes | 62.24 | 64.19 | (3.0) |
| Gasoline, diesel and kerosene production | million tonnes | 37.30 | 37.36 | (0.2) |
| Gasoline | million tonnes | 15.16 | 16.48 | (8.0) |
| Diesel | million tonnes | 15.58 | 15.72 | (0.9) |
| Kerosene | million tonnes | 6.56 | 5.16 | 27.1 |
| Light chemical feedstock production | million tonnes | 10.61 | 11.79 | (10.0) |
| Light product yield | % | 74.82 | 74.48 | 0.34<br><br> <br>percentage points |
| Refining yield | % | 94.88 | 95.26 | (0.38)<br><br> <br>percentage points |
Note: Including 100% production of domestic joint ventures.
Marketing and Distribution: The Company seized the favorable opportunity arising from the rapid recovery of demand, fully leveraged the advantages of integrated business and marketing network, strengthened resources coordination, made every effort to expand sales volume, and achieved significant improvement of the sales volume and profits. We optimised the sales network of refined oil products, made continuous efforts for the transition to an integrated energy service provider of Petro-Gas-Hydrogen-Power-Services. We continued to improve the quality and profitability for the non-fuel business. In the first quarter, total sales volume of refined oil products was 56.16 million tonnes, up by 10.1% year on year. The marketing and distribution segment realised EBIT of RMB
8.475 billion.
| Marketing and Distribution | Unit | Three-month period ended 31 March | Changes (%) | |
|---|---|---|---|---|
| 2023 | 2022 | |||
| Total sales volume of refined oil products | million tonnes | 56.16 | 51.02 | 10.1 |
| Total domestic sales volume of refined oil products | million tonnes | 44.57 | 41.06 | 8.5 |
| Retail | million tonnes | 29.36 | 27.34 | 7.4 |
| Direct sales & Distribution | million tonnes | 15.21 | 13.72 | 10.9 |
| Annualized average throughput per station | tonnes | 3,802 | 3,559 | 6.8 |
Note: The total sales volume of refined oil products includes the amount of trading volume.
Chemicals: Facing severe challenges resulting from the concentrated release of chemical capacity and fierce competition, the Company closely followed the market demand, optimised the structure of feedstock, facilities and products with a profit-driven orientation, maintained high
8
utilisation rate in profitable facilities, increased production of high value-added products such as PV- grade EVA and polybutadiene rubber, and reduced products with no marginal contribution. We actively promoted the construction of advanced capacity. In the first quarter, the ethylene production was 3.347 million tonnes, and the total chemicals sales volume was 20.69 million tonnes, up by 0.2% year on year. The chemicals segment realised EBIT of RMB -3.022 billion.
| Chemicals | Unit | Three-month period ended 31 March | Changes (%) | |
|---|---|---|---|---|
| 2023 | 2022 | |||
| Ethylene | thousand tonnes | 3,347 | 3,606 | (7.2) |
| Synthetic resin | thousand tonnes | 4,816 | 4,867 | (1.0) |
| Synthetic rubber | thousand tonnes | 349 | 353 | (1.1) |
| Monomers and polymers for synthetic fibre | thousand tonnes | 2,034 | 2,491 | (18.3) |
| Synthetic fibre | thousand tonnes | 258 | 286 | (9.8) |
Note: Including 100% production of domestic joint ventures.
Capital expenditure: In the first quarter, focusing on quality and return of investment, the Company continuously optimised its investment projects, with total capital expenditures of RMB 23.40 billion. The capital expenditures of the exploration and production segment were RMB 14.98 billion, mainly used for the crude oil and gas production capacity construction in Shunbei, Tahe, Western Sichuan and Southeast Sichuan, and construction of the Shengli Shale Oil National Demonstration Zone and storage and transportation facilities of Shandong LNG. The capital expenditures of the refining segment were RMB 4.22 billion, mainly used for the expansion of Zhenhai refinery and structural adjustment of Anqing and Yangzi refineries. The capital expenditures of the marketing and distribution segment were RMB 0.78 billion, mainly used for renovation of the existing stations. The capital expenditures of the chemicals segment were RMB 3.27 billion, mainly used for ethylene projects in Tianjin Nangang and Hainan, Yizheng PTA project, caprolactam relocation project in Baling, and new material projects in Zhenhai and Tianjin, etc. The capital expenditures of the corporate and others were RMB 0.15 billion, mainly used for information technology projects.
This report 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 |
|---|
| Ma Yongsheng |
| Chairman |
| 27 April 2023 |
9
| 4 | Appendix |
|---|---|
| 4.1 | Quarterly financial statements prepared under China Accounting Standards for Business Enterprises (CASs) |
| --- | --- |
Consolidated Balance Sheet
As at 31 March 2023
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
| Items | At 31 March 2023 | At 31 December 2022 |
|---|---|---|
| Current assets: | ||
| Cash at bank and on hand | 175,582 | 145,052 |
| Financial assets held for trading | 2 | 2 |
| Derivative financial assets | 15,338 | 19,335 |
| Accounts receivable | 70,122 | 46,364 |
| Receivables financing | 3,908 | 3,507 |
| Prepayments | 10,662 | 7,956 |
| Other receivables | 25,194 | 27,009 |
| Inventories | 254,077 | 244,241 |
| Other current assets | 29,884 | 29,674 |
| Total current assets | 584,769 | 523,140 |
| Non-current assets: | ||
| Long-term equity investments | 236,178 | 233,941 |
| Other equity instrument investments | 728 | 730 |
| Fixed assets | 631,001 | 630,758 |
| Construction in progress | 193,840 | 196,045 |
| Right-of-use assets | 177,616 | 178,359 |
| Intangible assets | 120,737 | 120,694 |
| Goodwill | 6,446 | 6,464 |
| Long-term deferred expenses | 12,031 | 12,034 |
| Deferred tax assets | 22,400 | 22,433 |
| Other non-current assets | 25,407 | 26,523 |
| Total non-current assets | 1,426,384 | 1,427,981 |
| Total assets | 2,011,153 | 1,951,121 |
10
Consolidated Balance Sheet (Continued)
| Current liabilities: | ||
|---|---|---|
| Short-term loans | 84,983 | 21,313 |
| Derivative financial liabilities | 8,921 | 7,313 |
| Bills payable | 12,398 | 10,782 |
| Accounts payable | 228,476 | 258,642 |
| Contract liabilities | 123,326 | 125,444 |
| Employee benefits payable | 17,363 | 13,617 |
| Taxes payable | 33,937 | 28,379 |
| Other payables | 90,722 | 119,892 |
| Non-current liabilities due within one year | 55,492 | 62,844 |
| Other current liabilities | 15,285 | 19,159 |
| Total current liabilities | 670,903 | 667,385 |
| Non-current liabilities: | ||
| Long-term loans | 129,943 | 94,964 |
| Debentures payable | 12,955 | 12,997 |
| Lease liabilities | 166,608 | 166,407 |
| Provisions | 48,086 | 47,587 |
| Deferred tax liabilities | 7,875 | 7,256 |
| Other non-current liabilities | 14,570 | 14,068 |
| Total non-current liabilities | 380,037 | 343,279 |
| Total liabilities | 1,050,940 | 1,010,664 |
| Shareholders’ equity: | ||
| Share capital | 119,896 | 119,896 |
| Capital reserve | 118,908 | 118,875 |
| Other comprehensive income | 799 | 3,072 |
| Specific reserve | 3,443 | 2,813 |
| Surplus reserves | 218,009 | 218,009 |
| Retained earnings | 345,908 | 325,806 |
| Total equity attributable to shareholders of the Company | 806,963 | 788,471 |
| Minority interests | 153,250 | 151,986 |
| Total shareholders’ equity | 960,213 | 940,457 |
| Total liabilities and shareholders’ equity | 2,011,153 | 1,951,121 |
| Ma Yongsheng | Yu Baocai | Shou Donghua |
| --- | --- | --- |
| Chairman | President | Chief Financial Officer |
| (Legal representative) |
11
Balance Sheet
As at 31 March 2023
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
| Items | At 31 March 2023 | At 31 December 2022 |
|---|---|---|
| Current assets: | ||
| Cash at bank and on hand | 80,622 | 54,578 |
| Financial assets held for trading | 2 | 2 |
| Derivative financial assets | 398 | 3,892 |
| Accounts receivable | 25,577 | 33,841 |
| Receivables financing | 805 | 703 |
| Prepayments | 3,958 | 4,461 |
| Other receivables | 44,560 | 38,517 |
| Inventories | 69,280 | 70,376 |
| Other current assets | 19,587 | 21,260 |
| Total current assets | 244,789 | 227,630 |
| Non-current assets: | ||
| Long-term equity investments | 387,824 | 382,879 |
| Other equity instrument investments | 201 | 201 |
| Fixed assets | 293,010 | 296,530 |
| Construction in progress | 85,514 | 81,501 |
| Right-of-use assets | 90,567 | 91,549 |
| Intangible assets | 8,384 | 8,095 |
| Long-term deferred expenses | 3,999 | 4,183 |
| Deferred tax assets | 9,391 | 9,487 |
| Other non-current assets | 40,885 | 41,365 |
| Total non-current assets | 919,775 | 915,790 |
| Total assets | 1,164,564 | 1,143,420 |
| Current liabilities： | ||
| Short-term loans | 58,970 | 4,010 |
| Derivative financial liabilities | 2,498 | 4,299 |
| Bills payable | 6,502 | 4,038 |
| Accounts payable | 90,208 | 107,105 |
| Contract liabilities | 8,059 | 9,769 |
| Employee benefits payable | 10,617 | 8,467 |
| Taxes payable | 17,371 | 12,044 |
| Other payables | 197,831 | 247,480 |
| Non-current liabilities due within one year | 30,811 | 39,990 |
| Other current liabilities | 688 | 1,002 |
| Total current liabilities | 423,555 | 438,204 |
12
Balance Sheet (Continued)
| Non-current liabilities： | ||
|---|---|---|
| Long-term loans | 84,865 | 56,755 |
| Debentures payable | 9,538 | 9,537 |
| Lease liabilities | 91,169 | 91,878 |
| Provisions | 38,825 | 38,298 |
| Other non-current liabilities | 2,027 | 2,121 |
| Total non-current liabilities | 226,424 | 198,589 |
| Total liabilities | 649,979 | 636,793 |
| Shareholders’ equity： | ||
| Share capital | 119,896 | 119,896 |
| Capital reserve | 63,631 | 63,628 |
| Other comprehensive income | (1,395) | 827 |
| Specific reserve | 2,106 | 1,745 |
| Surplus reserves | 218,009 | 218,009 |
| Retained earnings | 112,338 | 102,522 |
| Total shareholders’ equity | 514,585 | 506,627 |
| Total liabilities and shareholders’ equity | 1,164,564 | 1,143,420 |
| Ma Yongsheng | Yu Baocai | Shou Donghua |
| --- | --- | --- |
| Chairman | President | Chief Financial Officer |
| (Legal representative) |
13
Consolidated Income Statement
For the three-month period ended 31 March 2023
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
| Items | Three-month period ended 31 March 2023 | Three-month period ended 31 March 2022 |
|---|---|---|
| I. Total operating income | 791,331 | 771,386 |
| II. Total operating costs | 764,763 | 729,326 |
| Including: Operating costs | 666,004 | 622,875 |
| Taxes and surcharges | 62,707 | 71,186 |
| Selling and distribution expenses | 14,372 | 14,180 |
| General and administrative expenses | 13,172 | 13,091 |
| Research and development expenses | 2,841 | 2,706 |
| Financial expenses | 2,539 | 2,305 |
| Including: Interest expenses | 5,604 | 3,743 |
| Interest income | 2,670 | 1,387 |
| Exploration expenses, including dry holes | 3,128 | 2,983 |
| Add: Other income | 1,977 | 492 |
| Investment income /(loss) | 1,493 | (1,662) |
| Including: Income from investment in associates and joint ventures | 1,223 | 3,619 |
| Losses from changes in fair value | (244) | (6,937) |
| Credit impairment losses | (54) | (51) |
| Impairment losses | (414) | (201) |
| Asset disposal gains | 78 | 76 |
| III. Operating profit | 29,404 | 33,777 |
| Add: Non-operating income | 244 | 249 |
| Less: Non-operating expenses | 456 | 541 |
| IV. Profit before taxation | 29,192 | 33,485 |
| Less: Income tax expense | 6,328 | 6,795 |
| V. Net profit | 22,864 | 26,690 |
| Classification by going concern: | ||
| (i) Continuous operating net profit | 22,864 | 26,690 |
| (ii) Termination of net profit | - | - |
| Classification by ownership: | ||
| (i) Equity shareholders of the Company | 20,102 | 22,800 |
| (ii) Minority interests | 2,762 | 3,890 |
14
Consolidated Income Statement (Continued)
| VI. Total other comprehensive income | (1,219) | 2,500 |
|---|---|---|
| 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 | (326) | (768) |
| Cost of hedging reserve | - | (630) |
| Cash flow hedges | 515 | 4,556 |
| Foreign currency translation differences | (1,409) | (658) |
| VII. Total comprehensive income | 21,645 | 29,190 |
| Equity shareholders of the Company | 19,016 | 25,689 |
| Minority interests | 2,629 | 3,501 |
| VIII. Earnings per share: | ||
| (i) Basic earnings per share (RMB/Share) | 0.168 | 0.188 |
| (ii) Diluted earnings per share (RMB/Share) | 0.168 | 0.188 |
| Ma Yongsheng | Yu Baocai | Shou Donghua |
| --- | --- | --- |
| Chairman | President | Chief Financial Officer |
| (Legal representative) |
15
Income Statement
For the three-month period ended 31 March 2023
Prepared by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
| Items | Three-month period ended 31 March 2023 | Three-month period ended 31 March 2022 |
|---|---|---|
| I. Operating income | 303,400 | 318,615 |
| Less: Operating costs | 245,360 | 255,660 |
| Taxes and surcharges | 38,018 | 44,178 |
| Selling and distribution expenses | 374 | 413 |
| General and administrative expenses | 5,718 | 5,824 |
| Research and development costs | 2,568 | 2,616 |
| Financial expenses | 2,924 | 2,568 |
| Including: Interest expenses | 4,461 | 3,370 |
| Interest income | 1,561 | 805 |
| Exploration expenses, including dry holes | 2,755 | 2,635 |
| Add: Other income | 1,543 | 291 |
| Investment income | 4,314 | 2,651 |
| Including: Income from investment in associates and joint ventures | 1,012 | 1,356 |
| Gains/(losses) from changes in fair value | 227 | (179) |
| Credit impairment losses | (4) | (8) |
| Impairment reversals/(losses) | 85 | (1) |
| Asset disposal gains | 1 | 120 |
| II. Operating profit | 11,849 | 7,595 |
| Add: Non-operating income | 91 | 50 |
| Less: Non-operating expenses | 261 | 347 |
| III. Profit before taxation | 11,679 | 7,298 |
| Less: Income tax expense | 1,863 | 1,303 |
| IV. Net profit | 9,816 | 5,995 |
| (i) Continuous operating net profit | 9,816 | 5,995 |
| (ii) Termination of net profit | - | - |
| V. Total other comprehensive income | (1,592) | 1,558 |
| 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 | (56) | 112 |
| Cash flow hedges reserve | (1,536) | 1,446 |
| VI. Total comprehensive income | 8,224 | 7,553 |
| Ma Yongsheng | Yu Baocai | Shou Donghua |
| --- | --- | --- |
| Chairman | President | Chief Financial Officer |
| (Legal representative) |
16
Consolidated Cash Flow Statement
For the three-month period ended 31 March 2023 Prepared
by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
| Items | Three-month period ended 31 March 2023 | Three-month period ended 31 March 2022 |
|---|---|---|
| I. Cash flows from operating activities: | ||
| Cash received from sale of goods and rendering of services | 834,060 | 784,361 |
| Refund of taxes and levies | 2,220 | 165 |
| Other cash received relating to operating activities | 41,972 | 55,649 |
| Sub-total of cash inflows | 878,252 | 840,175 |
| Cash paid for goods and services | (738,348) | (663,927) |
| Cash paid to and for employees | (21,340) | (20,068) |
| Payments of taxes and levies | (73,344) | (122,520) |
| Other cash paid relating to operating activities | (63,617) | (80,441) |
| Sub-total of cash outflows | (896,649) | (886,956) |
| Net cash flow used in operating activities | (18,397) | (46,781) |
| II. Cash flows from investing activities: | ||
| Cash received from disposal of investments | 36 | 35 |
| Cash received from returns on investments | 407 | 1,095 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 1,849 | 6 |
| Other cash received relating to investing activities | 5,995 | 14,689 |
| Net cash received from disposal of subsidiaries and other business entities | - | 1 |
| Sub-total of cash inflows | 8,287 | 15,826 |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | (32,418) | (35,567) |
| Cash paid for acquisition of investments | (2,334) | (5,946) |
| Net cash paid for the acquisition of subsidiaries and other business entities | - | (1,562) |
| Other cash paid relating to investing activities | (27,824) | (10,831) |
| Sub-total of cash outflows | (62,576) | (53,906) |
| Net cash flow used in investing activities | (54,289) | (38,080) |
17
Consolidated Cash Flow Statement (Continued)
| III. Cash flows from financing activities: | ||
|---|---|---|
| Cash received from capital contributions | 88 | 779 |
| Including: Cash received from minority shareholders’ capital contributions to subsidiaries | 88 | 626 |
| Cash received from borrowings | 228,360 | 138,034 |
| Other cash received relating to financing activities | 20 | 24 |
| Sub-total of cash inflows | 228,468 | 138,837 |
| Cash repayments of borrowings | (139,146) | (73,648) |
| Cash paid for dividends, profits distribution or interest | (3,150) | (1,489) |
| Including: Subsidiaries’ cash payments for distribution of dividends or profits to minority shareholders | (1,554) | (188) |
| Other cash paid relating to financing activities | (3,887) | (4,920) |
| Sub-total of cash outflows | (146,183) | (80,057) |
| Net cash flows from financing activities | 82,285 | 58,780 |
| IV. Effects of changes in foreign exchange rate | (1,102) | (357) |
| V. Net increase/(decrease) in cash and cash equivalents | 8,497 | (26,438) |
| Add: Cash and cash equivalents at the beginning of the period | 93,438 | 108,590 |
| VI. Cash and cash equivalents at the end of the period | 101,935 | 82,152 |
| Ma Yongsheng | Yu Baocai | Shou Donghua |
| --- | --- | --- |
| Chairman | President | Chief Financial Officer |
| (Legal representative) |
18
Cash Flow Statement
For the three-month period ended 31 March 2023 Prepared
by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
| Items | Three-month period ended 31 March 2023 | Three-month period ended 31 March 2022 |
|---|---|---|
| I. Cash flows from operating activities: | ||
| Cash received from sale of goods and rendering of services | 339,803 | 342,305 |
| Refund of taxes and levies | 1,379 | 90 |
| Other cash received relating to operating activities | 10,193 | 7,902 |
| Sub-total of cash inflows | 351,375 | 350,297 |
| Cash paid for goods and services | (260,527) | (263,091) |
| Cash paid to and for employees | (10,659) | (10,585) |
| Payments of taxes and levies | (37,586) | (65,952) |
| Other cash paid relating to operating activities | (18,722) | (15,830) |
| Sub-total of cash outflows | (327,494) | (355,458) |
| Net cash flow received from /(used in) operating activities | 23,881 | (5,161) |
| II. Cash flows from investing activities: | ||
| Cash received from disposal of investments | 2,249 | 1,116 |
| Cash received from returns on investments | 3,666 | 1,277 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 39 | 2 |
| Other cash received relating to investing activities | 2,460 | 37,794 |
| Sub-total of cash inflows | 8,414 | 40,189 |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | (15,947) | (13,881) |
| Cash paid for acquisition of investments | (1,899) | (7,705) |
| Other cash paid relating to investing activities | (35,232) | (43,604) |
| Sub-total of cash outflows | (53,078) | (65,190) |
| Net cash flow used in investing activities | (44,664) | (25,001) |
| III. Cash flows from financing activities: | ||
| Cash received from borrowings | 101,758 | 65,601 |
| Other cash received relating to financing activities | 56,691 | 101,758 |
| Sub-total of cash inflows | 158,449 | 167,359 |
| Cash repayments of borrowings | (28,083) | (23,784) |
| Cash paid for dividends or interest | (1,779) | (1,941) |
| Other cash paid relating to financing activities | (89,729) | (125,190) |
| Sub-total of cash outflows | (119,591) | (150,915) |
| Net cash flow from financing activities | 38,858 | 16,444 |
19
Cash Flow Statement (Continued)
| IV. Effects of changes in foreign exchange rate | (32) | - |
|---|---|---|
| IV. Net increase/(decrease) in cash and cash equivalents | 18,043 | (13,718) |
| Add: Cash and cash equivalents at the beginning of the period | 23,228 | 34,575 |
| V. Cash and cash equivalents at the end of the period | 41,271 | 20,857 |
| Ma Yongsheng | Yu Baocai | Shou Donghua |
| --- | --- | --- |
| Chairman | President | Chief Financial Officer |
| (Legal representative) |
20
Segment Reporting
For the three-month period ended 31 March 2023 Prepared
by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
| Items | Three-month period ended 31 March 2023 | Three-month period ended 31 March 2022 |
|---|---|---|
| Income from principal operations | ||
| Exploration and production | ||
| External sales | 52,585 | 52,455 |
| Inter–segment sales | 26,175 | 28,752 |
| Subtotal | 78,760 | 81,207 |
| Refining | ||
| External sales | 45,216 | 47,758 |
| Inter–segment sales | 322,166 | 336,542 |
| Subtotal | 367,382 | 384,300 |
| Marketing and distribution | ||
| External sales | 412,676 | 370,095 |
| Inter–segment sales | 3,850 | 2,704 |
| Subtotal | 416,526 | 372,799 |
| Chemicals | ||
| External sales | 96,966 | 113,153 |
| Inter–segment sales | 21,999 | 21,115 |
| Subtotal | 118,965 | 134,268 |
| Corporate and others | ||
| External sales | 165,532 | 171,306 |
| Inter–segment sales | 213,426 | 244,714 |
| Subtotal | 378,958 | 416,020 |
| Elimination of inter–segment sales | (587,616) | (633,827) |
| Consolidated income from principal operations | 772,975 | 754,767 |
| Income from other operations | ||
| Exploration and production | 2,165 | 1,817 |
| Refining | 911 | 940 |
| Marketing and distribution | 12,418 | 10,754 |
| Chemicals | 2,330 | 2,600 |
| Corporate and others | 532 | 508 |
| Consolidated income from other operations | 18,356 | 16,619 |
| Consolidated operating income | 791,331 | 771,386 |
21
Segment Reporting (Continued)
| Operating profit | ||
|---|---|---|
| By segment | ||
| Exploration and production | 11,447 | 10,494 |
| Refining | 9,836 | 22,061 |
| Marketing and distribution | 8,062 | 9,318 |
| Chemicals | (2,144) | 1,157 |
| Corporate and others | 1,978 | 10,853 |
| Elimination | (540) | (9,770) |
| Total segment operating profit | 28,639 | 44,113 |
| Investment income | ||
| Exploration and production | 64 | 1,153 |
| Refining | 292 | 416 |
| Marketing and distribution | 609 | (148) |
| Chemicals | (1,239) | 568 |
| Corporate and others | 1,767 | (3,651) |
| Total segment investment income | 1,493 | (1,662) |
| Financial expenses | (2,539) | (2,305) |
| Losses from changes in fair value | (244) | (6,937) |
| Asset disposal gains | 78 | 76 |
| Other income | 1,977 | 492 |
| Operating profit | 29,404 | 33,777 |
| Add: Non-operating income | 244 | 249 |
| Less: Non-operating expenses | 456 | 541 |
| Profit before taxation | 29,192 | 33,485 |
22
| 4.2 | Quarterly financial statements prepared under International Financial Reporting Standards (IFRS) |
|---|
Consolidated Income Statement
For the three-month period ended 31 March 2023 Prepared
by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
| Items | Three-month period ended 31 March 2023 | Three-month period ended 31 March 2022 |
|---|---|---|
| Revenue | ||
| Revenue from primary business | 772,975 | 754,767 |
| Other operating revenues | 18,356 | 16,619 |
| Subtotal | 791,331 | 771,386 |
| Operating expenses | ||
| Purchased crude oil, products and operating supplies and expenses | (631,716) | (588,136) |
| Selling, general and administrative expenses | (13,504) | (13,575) |
| Depreciation, depletion and amortisation | (26,999) | (26,694) |
| Exploration expenses, including dry holes | (3,128) | (2,983) |
| Personnel expenses | (23,883) | (23,741) |
| Taxes other than income tax | (62,707) | (71,186) |
| Impairment losses on trade and other receivables | (54) | (51) |
| Other operating income/(expenses), net | 1,750 | (12,060) |
| Total operating expenses | (760,241) | (738,426) |
| Operating profit | 31,090 | 32,960 |
| Finance costs | ||
| Interest expense | (5,604) | (3,743) |
| Interest income | 2,670 | 1,387 |
| Foreign currency exchange gain, net | 395 | 51 |
| Net finance costs | (2,539) | (2,305) |
| Investment income | 111 | 64 |
| Share of profits less losses from associates and joint ventures | 1,223 | 3,619 |
| Profit before taxation | 29,885 | 34,338 |
| Income tax expense | (6,328) | (6,795) |
| Profit for the period | 23,557 | 27,543 |
| Attributable to： | ||
| Shareholders of the Company | 20,740 | 23,533 |
| Non-controlling interests | 2,817 | 4,010 |
| Profit for the period | 23,557 | 27,543 |
| Earnings per share | ||
| Basic earnings per share (RMB/Share) | 0.173 | 0.194 |
| Diluted earnings per share (RMB/Share) | 0.173 | 0.194 |
23
Consolidated Statement of Comprehensive Income
For the three-month period ended 31 March 2023 Prepared
by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
| Items | Three-month period ended 31 March 2023 | Three-month period ended 31 March 2022 |
|---|---|---|
| Profit for the period | 23,557 | 27,543 |
| Total other comprehensive income: | (1,219) | 2,500 |
| 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: | ||
| Cost of hedging reserve | - | (630) |
| Share of other comprehensive income of associates and joint ventures | (326) | (768) |
| Cash flow hedges | 515 | 4,556 |
| Foreign currency translation differences | (1,409) | (658) |
| Total comprehensive income | 22,338 | 30,043 |
| Attributable to: | ||
| Shareholders of the Company | 19,654 | 26,422 |
| Non–controlling interests | 2,684 | 3,621 |
24
Consolidated Statement of Financial Position
For the three-month period ended 31 March 2023 Prepared
by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
| Items | At 31 March 2023 | At 31 December 2022 |
|---|---|---|
| Non-current assets: | ||
| Property, plant and equipment, net | 630,916 | 630,700 |
| Construction in progress | 193,840 | 196,045 |
| Right-of-use assets | 263,953 | 264,856 |
| Goodwill | 6,446 | 6,464 |
| Interest in associates | 161,310 | 159,150 |
| Interest in joint ventures | 74,868 | 74,791 |
| Financial assets at fair value through other comprehensive income | 728 | 730 |
| Deferred tax assets | 22,400 | 22,433 |
| Long-term prepayments and other non-current assets | 71,923 | 72,812 |
| Total non-current assets | 1,426,384 | 1,427,981 |
| Current assets: | ||
| Cash and cash equivalents | 101,935 | 93,438 |
| Time deposits with financial institutions | 73,647 | 51,614 |
| Financial assets at fair value through profit or loss | 2 | 2 |
| Derivatives financial assets | 15,338 | 19,335 |
| Trade accounts receivable | 70,122 | 46,364 |
| Financial assets at fair value through other comprehensive income | 3,908 | 3,507 |
| Inventories | 254,077 | 244,241 |
| Prepaid expenses and other current assets | 65,740 | 64,639 |
| Total current assets | 584,769 | 523,140 |
| Current liabilities: | ||
| Short-term debts | 114,164 | 59,037 |
| Loans from Sinopec Group Company and fellow subsidiaries | 7,483 | 7,292 |
| Lease liabilities | 16,931 | 16,004 |
| Derivatives financial liabilities | 8,921 | 7,313 |
| Trade accounts payable and bills payable | 240,874 | 269,424 |
| Contract liabilities | 123,326 | 125,444 |
| Other payables | 154,201 | 178,146 |
| Income tax payable | 5,003 | 4,725 |
| Total current liabilities | 670,903 | 667,385 |
25
Consolidated Statement of Financial Position (Continued)
| Net current liabilities | 86,134 | 144,245 |
|---|---|---|
| Total assets less current liabilities | 1,340,250 | 1,283,736 |
| Non-current liabilities: | ||
| Long-term debts | 120,620 | 85,706 |
| Loans from Sinopec Group Company and fellow subsidiaries | 22,278 | 22,255 |
| Lease liabilities | 166,608 | 166,407 |
| Deferred tax liabilities | 7,875 | 7,256 |
| Provisions | 48,086 | 47,587 |
| Other long-term liabilities | 15,478 | 14,983 |
| Total non-current liabilities | 380,945 | 344,194 |
| Total net assets | 959,305 | 939,542 |
| Equity: | ||
| Share capital | 119,896 | 119,896 |
| Reserves | 686,203 | 667,704 |
| Total equity attributable to shareholders of the Company | 806,099 | 787,600 |
| Non-controlling interests | 153,206 | 151,942 |
| Total equity | 959,305 | 939,542 |
26
Consolidated Statement of Cash Flows
For the three-month period ended 31 March 2023 Prepared
by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
| Items | Three-month period ended 31 March 2023 | Three-month period ended 31 March 2022 |
|---|---|---|
| Net cash used in operating activities(a) | (18,397) | (46,781) |
| Investing activities | ||
| Capital expenditure | (27,956) | (31,762) |
| Exploratory wells expenditure | (4,462) | (3,805) |
| Purchase of investments | (2,334) | (4,946) |
| Payment for financial assets at fair value through profit or loss | - | (1,000) |
| Payment for acquisition of subsidiary, net of cash acquired | - | (1,562) |
| Proceeds from disposal of investments | 36 | 36 |
| Proceeds from disposal of property, plant, equipment and other non-current assets | 1,849 | 6 |
| Increase in time deposits with maturities over three months | (27,219) | (6,511) |
| Decrease in time deposits with maturities over three months | 4,335 | 13,516 |
| Interest received | 2,381 | 1,311 |
| Investment and dividend income received | 407 | 1,095 |
| Payments of other investing activities | (1,326) | (4,458) |
| Net cash used in investing activities | (54,289) | (38,080) |
| Financing activities | ||
| Proceeds from bank and other loans | 228,360 | 138,034 |
| Repayments of bank and other loans | (139,146) | (73,648) |
| Contributions to subsidiaries from non-controlling interests | 88 | 779 |
| Distributions by subsidiaries to non-controlling interests | (1,554) | (188) |
| Interest paid | (1,596) | (1,301) |
| Repayments of lease liabilities | (3,867) | (3,174) |
| Proceeds from other financing activities | 20 | 24 |
| Repayments of other financing activities | (20) | (1,746) |
| Net cash generated from financing activities | 82,285 | 58,780 |
| Net increase/(decrease) in cash and cash equivalents | 9,599 | (26,081) |
| Cash and cash equivalents at 1 January | 93,438 | 108,590 |
| Effect of foreign currency exchange rate changes | (1,102) | (357) |
| Cash and cash equivalents at 31 March | 101,935 | 82,152 |
27
Note to Consolidated Statement of Cash Flows
For the three-month period ended 31 March 2023 Prepared
by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
(a) Reconciliation from profit before taxation to net cash used in operating activities
| Items | Three-month period ended 31 March 2023 | Three-month period ended 31 March 2022 |
|---|---|---|
| Operating activities | ||
| Profit before taxation | 29,885 | 34,338 |
| Adjustments for: | ||
| Depreciation, depletion and amortisation | 26,999 | 26,694 |
| Dry hole costs written off | 1,792 | 1,886 |
| Share of profits from associates and joint ventures | (1,223) | (3,619) |
| Investment income | (111) | (64) |
| Interest income | (1,553) | (1,387) |
| Interest expense | 4,487 | 3,743 |
| (Gain)/Loss on foreign currency exchange rate changes and derivative financial instruments | (314) | 6,886 |
| Gain on disposal of property, plant, equipment and other non-current assets, net | (7) | (76) |
| Impairment losses on assets | 414 | 201 |
| Impairment losses on trade and other receivables | 54 | 51 |
| Operating profit before change of operating capital | 60,423 | 68,653 |
| Accounts receivable and other current assets | (25,116) | (59,265) |
| Inventories | (10,234) | (82,616) |
| Accounts payable and other current liabilities | (38,424) | 33,019 |
| Subtotal | (13,351) | (40,209) |
| Income tax paid | (5,046) | (6,572) |
| Net cash used in operating activities | (18,397) | (46,781) |
28
Segment Reporting
For the three-month period ended 31 March 2023 Prepared
by: China Petroleum & Chemical Corporation
Units: million Currency: RMB Type: unaudited
| Items | Three-month period ended 31 March 2023 | Three-month period ended 31 March 2022 |
|---|---|---|
| Revenue | ||
| Exploration and production | ||
| External sales | 52,585 | 52,455 |
| Inter-segment sales | 26,175 | 28,752 |
| Subtotal | 78,760 | 81,207 |
| Refining | ||
| External sales | 45,216 | 47,758 |
| Inter-segment sales | 322,166 | 336,542 |
| Subtotal | 367,382 | 384,300 |
| Marketing and distribution | ||
| External sales | 412,676 | 370,095 |
| Inter-segment sales | 3,850 | 2,704 |
| Subtotal | 416,526 | 372,799 |
| Chemicals | ||
| External sales | 96,966 | 113,153 |
| Inter-segment sales | 21,999 | 21,115 |
| Subtotal | 118,965 | 134,268 |
| Corporate and others | ||
| External sales | 165,532 | 171,306 |
| Inter-segment sales | 213,426 | 244,714 |
| Subtotal | 378,958 | 416,020 |
| Elimination of inter-segment sales | (587,616) | (633,827) |
| Revenue from primary business | 772,975 | 754,767 |
| Other operating revenues | ||
| Exploration and production | 2,165 | 1,817 |
| Refining | 911 | 940 |
| Marketing and distribution | 12,418 | 10,754 |
| Chemicals | 2,330 | 2,600 |
| Corporate and others | 532 | 508 |
| Other operating revenues | 18,356 | 16,619 |
| Revenue | 791,331 | 771,386 |
29
Segment Reporting (Continued)
| Result | ||
|---|---|---|
| Operating profit/(loss) | ||
| By segment | ||
| Exploration and production | 12,847 | 10,429 |
| Refining | 10,403 | 22,493 |
| Marketing and distribution | 7,921 | 8,564 |
| Chemicals | (1,780) | 1,325 |
| Corporate and others | 2,239 | (81) |
| Elimination | (540) | (9,770) |
| Total segment operating profit | 31,090 | 32,960 |
| Share of profits from associates and joint ventures | ||
| Exploration and production | 510 | 1,024 |
| Refining | 46 | 421 |
| Marketing and distribution | 551 | 392 |
| Chemicals | (1,147) | 630 |
| Corporate and others | 1,263 | 1,152 |
| Aggregate share of profits from associates and joint ventures | 1,223 | 3,619 |
| Investment income | ||
| Exploration and production | - | 10 |
| Refining | 10 | 5 |
| Marketing and distribution | 3 | 37 |
| Chemicals | (95) | (65) |
| Corporate and others | 193 | 77 |
| Aggregate investment income | 111 | 64 |
| Net finance costs | (2,539) | (2,305) |
| Profit before taxation | 29,885 | 34,338 |
30
| 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 recognised 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 recognised 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 2023 | Three-month period ended 31 March 2022 |
|---|---|---|
| Net profit under CASs | 22,864 | 26,690 |
| Adjustments: | ||
| Government grants(i) | 7 | 5 |
| Safety production fund(ii) | 686 | 848 |
| Profit for the period under IFRS | 23,557 | 27,543 |
31
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 | As of 31 March 2023 | As of 31 December 2022 |
|---|---|---|
| Shareholders’ equity under CASs | 960,213 | 940,457 |
| Adjustments: | ||
| Government grants(i) | (908) | (915) |
| Total equity under IFRS | 959,305 | 939,542 |
| 4.4 | Description of and reasons for changes in accounting policies | |
| --- | --- | |
| 4.4.1 | Description of and reasons for changes in accounting policies under CASs | |
| --- | --- |
In 2023, the Group has adopted the accounting requirements and guidance under CAS newly issued by the Ministry of Finance.
| - | “Accounting treatment of deferred tax related to assets and liabilities arising from a single transaction for which initial recognition exemption does not apply” in CAS Bulletin<br> No.16. |
|---|---|
| (a) | Accounting treatment of deferred tax related to assets and liabilities arising from a single transaction for which initial recognition exemption does not apply: |
| --- | --- |
In accordance with CAS Bulletin No.16, the provisions of the Accounting Standards for Business Enterprises No. 18 — Income Taxes on exemption from initial recognition of deferred tax liabilities and deferred tax assets shall not apply to single transactions that are not business combinations, that do not affect accounting profits or taxable income (or deductible losses) upon transaction’s occurrence, and result in equal amount of taxable temporary differences and deductible temporary differences caused by initially recognised assets and liabilities. As for the taxable temporary differences and deductible temporary differences arising from the initial recognition of assets and liabilities in a single transaction, the Group shall, according to the Accounting Standards for Business Enterprises No. 18 — Income Taxes and other relevant provisions, respectively recognise the corresponding deferred tax liabilities and deferred tax assets upon the occurrence of the transaction.
The Group has made retrospective adjustments in accordance with these requirements for applicable single transactions occurring between 1 January 2022 and the date of initial implementation. With regard to deductible temporary differences and taxable temporary differences arising from lease liabilities and right-of-use assets recognised as at 1 January 2022 as a result of single transactions to which these provisions apply, the Group shall, in accordance with CAS Bulletin No.16 and Accounting Standards for Business Enterprises No. 18 — Income Taxes, adjust the cumulative effect amount with the retained earnings at the beginning of the earliest period presented in the financial statements and other relevant items of the financial statements.
32
| (b) | The effects on the comparative financial statements |
|---|
The effects of the above changes in accounting policies on the net profit for the three-month period ended 31 March 2022 and equity at the beginning and the end of 2022 are summarised as follows:
Units: million Currency: RMB Type: unaudited
| Items | The Group | ||
|---|---|---|---|
| Net profit for the three months ended 31 March 2022 | 2022 Closing balance of shareholders’ equity | 2022 Opening balance of shareholders’ equity | |
| The effects of the exemption of initial recognition not applicable to the deferred tax relating<br> to assets and liabilities arising out of a single transaction | 214 | 3,304 | 2,448 |
| Net profit and shareholders’ equity after adjustments | 26,690 | 940,457 | 918,489 |
Units: million Currency: RMB Type: unaudited
| Items | The Company | ||
|---|---|---|---|
| Net profit for the three months ended 31 March 2022 | 2022 Closing balance of shareholders’ equity | 2022 Opening balance of shareholders’ equity | |
| The effects of the exemption of initial recognition not applicable to the deferred tax related to<br> assets and liabilities arising from a single transaction | 133 | 1,750 | 1,217 |
| Net profit and shareholders’ equity after adjustments | 5,995 | 506,627 | 527,531 |
33
The effects of the above changes in accounting policies on each item of the consolidated balance sheet as at 31 December 2022 and the Company's balance sheet are summarized as follows:
Consolidated Balance Sheet
Units: million Currency: RMB Type: unaudited
| Items | As of 31 December 2022 before adjustment | As of 31 December 2022 adjusted | Adjusted amount |
|---|---|---|---|
| Non-current assets: | |||
| Deferred tax assets | 19,952 | 22,433 | 2,481 |
| Total non-current assets | 1,425,500 | 1,427,981 | 2,481 |
| Total assets | 1,948,640 | 1,951,121 | 2,481 |
| Non-current liabilities: | |||
| Deferred tax liabilities | 8,079 | 7,256 | (823) |
| Total non-current liabilities | 344,102 | 343,279 | (823) |
| Total liabilities | 1,011,487 | 1,010,664 | (823) |
| Shareholders’ equity: | |||
| Surplus reserves | 217,834 | 218,009 | 175 |
| Retained earnings | 323,087 | 325,806 | 2,719 |
| Total equity attributable to shareholders of the Company | 785,577 | 788,471 | 2,894 |
| Minority interests | 151,576 | 151,986 | 410 |
| Total shareholders’ equity | 937,153 | 940,457 | 3,304 |
| Total liabilities and shareholders’ equity | 1,948,640 | 1,951,121 | 2,481 |
Balance Sheet
Units: million Currency: RMB Type: unaudited
| Items | As of 31 December 2022 before adjustment | As of 31 December 2022 adjusted | Adjusted amount |
|---|---|---|---|
| Non-current assets: | |||
| Deferred tax assets | 7,737 | 9,487 | 1,750 |
| Total non-current assets | 914,040 | 915,790 | 1,750 |
| Total assets | 1,141,670 | 1,143,420 | 1,750 |
| Shareholders’ equity: | |||
| Surplus reserves | 217,834 | 218,009 | 175 |
| Retained earnings | 100,947 | 102,522 | 1,575 |
| Total shareholders’ equity | 504,877 | 506,627 | 1,750 |
| Total liabilities and shareholders’ equity | 1,141,670 | 1,143,420 | 1,750 |
34
The effects of the above changes in accounting policies on each item of the consolidated income statement for the three-month period ended 31 March 2022 and the Company's income statement are summarized as follows:
Consolidated Income Statement
Units: million Currency: RMB Type: unaudited
| Items | Three-month period ended 31 March 2022 before adjustment | Three-month period ended 31 March 2022 adjusted | Adjusted amount |
|---|---|---|---|
| Income tax expense | 7,009 | 6,795 | (214) |
| V. Net profit | 26,476 | 26,690 | 214 |
| Classification by going concern: | |||
| (i) Continuous operating net profit | 26,476 | 26,690 | 214 |
| Classification by ownership: | |||
| (i) Equity shareholders of the Company | 22,605 | 22,800 | 195 |
| (ii) Minority interests | 3,871 | 3,890 | 19 |
| VII. Total comprehensive income | 28,976 | 29,190 | 214 |
| Equity shareholders of the Company | 25,494 | 25,689 | 195 |
| Minority interests | 3,482 | 3,501 | 19 |
| VIII. Earnings per share | |||
| (i) Basic earnings per share (RMB/Share) | 0.187 | 0.188 | 0.001 |
| (ii) Diluted earnings per share (RMB/Share) | 0.187 | 0.188 | 0.001 |
Income Statement
Units: million Currency: RMB Type: unaudited
| Items | Three-month period ended 31 March 2022 before adjustment | Three-month period ended 31 March 2022 adjusted | Adjusted amount |
|---|---|---|---|
| Income tax expense | 1,436 | 1,303 | (133) |
| IV. Net profit | 5,862 | 5,995 | 133 |
| (i) Continuous operating net profit | 5,862 | 5,995 | 133 |
| VI. Total comprehensive income | 7,420 | 7,553 | 133 |
35
| 4.4.2 | Description of and reasons for changes in accounting policies under IFRS |
|---|---|
| (a) | Accounting treatment of deferred tax related to assets and liabilities arising from a single transaction for which initial recognition exemption does not apply. |
| --- | --- |
The International Accounting Standards Board has amended IAS 12 and the scope of the exemption in paragraphs 15 and 24 of the previous standard is amended to "accounting treatment of deferred tax related to assets and liabilities arising from a single transaction for which initial recognition exemption does not apply", therefore, the Group needs to recognise deferred tax assets and deferred tax liabilities for temporary differences arising from these transactions. The amendment is effective for annual reporting periods beginning on or after 1 January 2023, with earlier application permitted. The Group applies the amendments to transactions occurring on or after the beginning of the earliest comparative period listed, with any cumulative effect recognised as an adjustment to retained earnings and other related financial statement items at that date.
| (b) | The effects on the comparative financial statements |
|---|
The effects of the above changes in accounting policies on the net profit for the three-month period ended 31 March 2022 and equity at the beginning and the end of 2022 are summarised as follows:
Units: million Currency: RMB Type: unaudited
| Items | The Group | ||
|---|---|---|---|
| Profit for the three-month period ended 31 March 2023 | Equity as of 31 December 2022 | Equity as of 1 January 2022 | |
| The effects of the exemption of initial recognition not applicable to the deferred tax related to<br> assets and liabilities arising from a single transaction | 214 | 3,304 | 2,448 |
| Net profit and equity after adjustments | 27,543 | 939,542 | 917,522 |
36
The effects of the above changes in accounting policies on each item of the consolidated income statement for the three-month period ended 31 March 2022 are summarized as follows:
Consolidated Income Statement
Units: million Currency: RMB Type: unaudited
| Items | Three-month period ended 31 March 2022 before adjustment | Three-month period ended 31 March 2022 adjusted | Adjusted amount |
|---|---|---|---|
| Income tax expense | (7,009) | (6,795) | 214 |
| Profit for the period | 27,329 | 27,543 | 214 |
| Attributable to: | |||
| Owners of the Company | 23,338 | 23,533 | 195 |
| Non-controlling interests | 3,991 | 4,010 | 19 |
| Profit for the period | 27,329 | 27,543 | 214 |
| Earnings per share: | |||
| Basic earnings per share (RMB/Share) | 0.193 | 0.194 | 0.001 |
| Diluted earnings per share (RMB/Share) | 0.193 | 0.194 | 0.001 |
The effects of the above changes in accounting policies on each item of the consolidated statement of comprehensive income for the three-month period ended 31 March 2022 are summarized as follows:
Consolidated Income Statement
Units: million Currency: RMB Type: unaudited
| Items | Three-month period ended 31 March 2022 before adjustment | Three-month period ended 31 March 2022 adjusted | Adjusted amount |
|---|---|---|---|
| Total comprehensive income for the period | 29,829 | 30,043 | 214 |
| Attributable to: | |||
| Shareholders of the Company | 26,227 | 26,422 | 195 |
| Non-controlling interests | 3,602 | 3,621 | 19 |
37
The effects of the above changes in accounting policies on each item of the consolidated balance sheet as at 31 December 2022 are summarized as follows:
Consolidated Balance Sheet
Units: million Currency: RMB Type: unaudited
| Items | As of 31 December 2022 before adjustment | As of 31 December 2022 adjusted | Adjusted amount |
|---|---|---|---|
| Non-current assets: | |||
| Deferred tax assets | 19,952 | 22,433 | 2,481 |
| Total non-current assets | 1,425,500 | 1,427,981 | 2,481 |
| Current liabilities: | |||
| Net current liabilities | 144,245 | 144,245 | - |
| Total assets less current liabilities | 1,281,255 | 1,283,736 | 2,481 |
| Non-current liabilities: | |||
| Deferred tax liabilities | 8,079 | 7,256 | (823) |
| Total non-current liabilities | 345,017 | 344,194 | (823) |
| Total net assets | 936,238 | 939,542 | 3,304 |
| Equity: | |||
| Reserves | 664,810 | 667,704 | 2,894 |
| Total equity attributable to shareholders of the Company | 784,706 | 787,600 | 2,894 |
| Non-controlling interests | 151,532 | 151,942 | 410 |
| Total equity | 936,238 | 939,542 | 3,304 |
38
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 28 2023