SINOPEC Engineering Announces 2013 Interim Results

              SINOPEC Engineering Announces 2013 Interim Results

Achieves Steady Business Growth and Strengthens Market Leadership

PR Newswire

HONG KONG, Aug. 20, 2013

HONG KONG, Aug. 20, 2013 /PRNewswire/ -- SINOPEC Engineering (Group) Co., Ltd.
("SINOPEC SEG" or "the Company", together with its subsidiaries known as the
"Group") (stock code: 2386) today announces its interim results for the six
months ended 30 June 2013 (the "Period").

Results Highlights

  oThe Group achieved total revenue of approximately RMB19.645 billion, up
    16.3% year-on-year. Profit attributable to shareholders reached
    approximately RMB2.214 billion, up 10.8% from a year ago. Basic earnings
    per share were RMB0.66, up 3.1% from the same period last year.
  oThe board of directors resolved to pay an interim dividend of RMB0.134 per
    share.
  oDuring the Period, the value of new contracts amounted to approximately
    RMB45.080 billion, representing a significant growth of 244.2% over the
    same period last year. At the end of the Period, the Group's backlog
    reached approximately RMB101.485 billion, up 33.4% from the year end of
    2012 and accounting for 2.6 times of the annual revenue of RMB38.526
    billion for 2012.
  oThe Group's revenue growth was mainly driven by Engineering, Consulting
    and Licensing as well as EPC Contracting operations in terms of business
    segment. During the Period, revenue from Engineering, Consulting and
    Licensing operations surged 34.9% year-on-year, while that of EPC
    Contracting operations advanced 27.2% year-on-year.
  oThe Group derived its revenue mainly from New Coal Chemicals and
    Petrochemicals industries in terms of revenue sources by industries.
    During the Period, revenue from New Coal Chemicals industry surged 65.0%
    year-on-year, while revenue from Petrochemicals industry soared 27.2%
    year-on-year
  oRevenue from the PRC increased 14.0% year-on-year to approximately
    RMB16.190 billion, accounting for 82.4% of the Group's total revenue.
    Meanwhile, the overseas revenue grew 28.5% year-on-year to approximately
    RMB3.455 billion, accounting for 17.6% of the Group's total revenue.

Business Highlights

  oSuccessful Implementation of Major Projects:

       oThe engineering, procurement and construction of Jingbian Coal
         Chemical Complex was basically completed and the Group will start to
         conduct commissioning and start-up of the project.
       oMore than 50% of all the units at Yulin Coal Chemical Complex were
         finished, with its safety, quality and development progress is all
         under control.
       oWuhan Ethylene Complex commenced full operation on 23 August 2013.
         Meanwhile, the design of Sinochem Quanzhou Complex has been completed
         and all the major equipment and materials have been procured.
       oThe development of Shijiazhuang Oil Refining and Chemical Complex is
         progressing well and 70% of the project has been completed.

  oExcellent Results in Market Development: While maintaining leading
    advantages in traditional industries such as oil refinery and
    petrochemicals, the Group stepped up efforts to explore business
    opportunities in domestic and overseas coal chemical markets. During the
    Period, the Group signed a number of new contracts with total value of
    RMB45.080 billion, including RMB22.443 billion for domestic contracts and
    RMB22.637 billion for overseas contracts.

    Representative domestic projects signed during the Period included:

       othe DMTO-II unit for the 700 Ktpa coal-to-olefin project of Pucheng
         Clean Energy Chemical Co., Ltd., with an EPC contract value of
         RMB2.398 billion;
       othe DMTO unit for the 300 Ktpa polyethylene project and the 390 Ktpa
         polypropylene project of Zhejiang Xingxing New Energy Co., Ltd., with
         an EPC contract value of RMB1.819 billion;
       othe tank farm project for Shandong LNG project of SINOPEC Qingdao LNG
         Co., Ltd., with an EPC contract value of RMB1.665 billion;
       othe 400 Ktpa phenol-acetone project of SINOPEC Shanghai Mitsui
         Chemical Co., Ltd., with an EPC contract value of RMB1.230 billion.

The traditional petrochemical industry remained the core business of the
Company, as shown by the significant increase in the number of new contracts
signed. Meanwhile, the number of new contracts signed for new coal chemical
projects continued to grow with their total value reached RMB9.069 billion.
The coal chemical projects in Zhijin, Guizhou Province and Hebi, Henan
Province that the Group has pushed ahead were given the approval by the
National Development and Reform Commission ("NDRC") to start pre-launch
efforts during the Period. The ethylene and oil refining reconstruction and
expansion project of Hainan Refining Chemical Co., Ltd. and the integration
project for phase II of CNOOC Huizhou Refining have also been approved by the
NDRC. In addition to the above projects, the Group has also followed a number
of important projects and expects an optimistic prospect for market
exploration.

Representative overseas projects signed during the Period included:

     othe USA PTA and PET project, with a contract value of USD1.150 billion;
     othe EPC Commissioning/Start-Up Contracting (EPCC) contract for the
       Kazakhstan KPI project, with a contract value of USD1.850 billion.



  oLeading Technical Strengths: Levering on the steady progress of its R&D in
    major technologies for key engineering projects, the Group has made
    remarkable achievements in 35 major technological R&D projects. In the
    first half of this year, 39 new technology licensing contracts were
    signed, amounting to a total value of RMB199 million. The Group completed
    202 new patent applications and was granted 121 patents. Moreover, it won
    22 awards from the provincial / ministerial-level governments for its
    technological progress.
  oIntensified Corporate Reform: The Group has pushed ahead with an all-round
    corporate reform, aiming to develop itself into "a world-class energy and
    chemical engineering company" and to create an "integrated operation model
    and a group-wide approach to management and control". It endeavors to
    establish a new set of institutions, mechanisms and a group-wide
    management system that can effectively promote the Group's long-term
    development and drive its robust business growth.
  oSafe Production: During the Period, the Group vigorously strengthened
    implementation and accountability in QHSE management. It stuck to the
    guiding philosophy of "safety comes first and prevention of accidents
    under coordinated efforts is the first priority". Moreover, management
    actively introduced modern management concepts and methods into the Group.
    As a result, the Group recorded an aggregate of 119.74 million safe
    man-hours for the Period, with no quality or production accidents were
    made.

Financial Data and Indicators Prepared in Accordance with IFRS
Unit: RMB'000
                                                As at       Changes

                                    As at        31 December from the end
                                                  2012
Items                                30 June 2013             of last year (%)
Total assets                         47,428,498   37,130,025  27.7
Total equity attributable to                                
shareholders
                                     19,907,145   7,077,985   181.3
of the Company
Net assets per share attributable to                        

shareholders of the Company (RMB)   4.50         2.28        97.4

                                                              Unit: RMB'000
                                                             Changes over the
                                                              same
                              Six-monthperiodsended30June period of the
                                                              preceding year
Items                         2013            2012            (%)
Revenue                       19,645,416      16,888,392      16.3
Gross profit                  3,645,816       3,077,236       18.5
Operating profit              2,821,410       2,269,798       24.3
Profit before taxation        2,930,287       2,583,889       13.4
Net profit attributable to                                  
shareholders
                              2,214,134       1,998,504       10.8
of the Company
Basic earnings per share      0.66            0.64            3.1
(RMB)
Net cash flow used in         (905,213)       (2,668,792)     N/A
operating activities
Net cash flow used in                        
operating                                                     N/A
                              (0.27)          (0.86)
activities per share (RMB)

                              Six-month periods ended 30 June
Items                         2013            2012
Gross profit margin(%)        18.56           18.22
Net profit margin(%)          11.27           11.83
Return on assets(%)           5.24            5.25
Return on equity(%)           11.12           35.59
Return on invested capital(%) 11.24           35.35


                         As of 30 June 2013 As at 31 December 2012
Items
Asset-liability ratio(%) 58.02              80.93

Business Review

Mr. Cai Xiyou, Chairman of SINOPEC SEG, commented, "The year 2013 marks a
milestone for SINOPEC Engineering as it was listed in May on the main board of
the Stock Exchange of Hong Kong. Our listing signifies that the Group has
successfully tapped into the international capital markets. This is the first
results announcement made since our listing. It highlights the Group's
development strategies to focus on integrated business development,
internationalization, differentiation, continuous innovation and low-carbon
emission and its efforts to become a world-class energy and chemical
engineering enterprise. During the Period, the Group achieved 16.3% and 10.8%
year-on-year growth respectively in revenue and net profit and made
satisfactory operating results."

"We also achieved promising results in market development. While retaining
leadership in traditional markets, the Group actively expanded domestic coal
chemical markets and stepped up efforts in overseas market exploration. During
the Period, we concluded two EPC contracting agreements abroad."

Business Performance by Segment

The Group's revenue increased 16.3% year-on-year to RMB19.645 billion in the
first half of 2013, benefited mainly by several large Engineering, Procurement
and Construction Contracting ("EPC Contracting") projects that entered their
peak construction stage this year, including the Yanchang Petroleum Jingbian
Energy Chemical Complex ("Jingbian Coal Chemical Complex"), Shaanxi Yulin
Methanol Acetic Acid Deep Processing and Comprehensive Utilization Complex
("Yulin Coal Chemical Complex"), Wuhan 800 thousand tons per annum ("Ktpa")
Ethylene Complex ("Wuhan Ethylene Complex"), Sinochem Quanzhou 12 million tons
per annum ("Mtpa") Oil Refining Complex ("Sinochem Quanzhou Complex"), Refined
Oil Quality Upgrading and Heavy Crude Oil Adapting Complex of Shijiazhuang
Refining and Chemical Company ("Shijiazhuang Refining and Chemical Complex").

The Group's businesses mainly comprise four segments: (1) Engineering,
Consulting and Technology Licensing; (2) EPC Contracting; (3) Construction and
(4) Equipment Manufacturing.

The Engineering, Consulting and Licensing segment is the Group's core
business. It provides a variety of engineering and consulting services during
a project's preparatory work phase, definition phase and implementation phase.
Meanwhile, the Licensing business will benefit the development of its
Engineering, Consulting and EPC Contracting operations. During the Period,
revenue from Engineering, Consulting and Licensing segment amounted to
approximately RMB2.264 billion, up 34.9% year-on-year.

The Group provides a full range of EPC contracting services throughout the
entire course of engineering and construction projects, which range from
process design packages to commissioning and start-up for large and complex
engineering and construction projects. Revenue from EPC Contracting segment
for the Period totaled approximately RMB10.595 billion, up 27.2% year-on-year.

The Group is one of the largest service providers of construction contracting
and specialized construction in the oil refining and chemical industries in
the PRC. Revenue from Construction segment for the Period grew 8.1%
year-on-year to approximately RMB8.099 billion.

The Group is also one of the major manufacturers and suppliers of large static
equipment used in oil refineries and chemical plants in the PRC. Revenue from
Equipment Manufacturing segment for the Period declined 5.0% year-on-year to
approximately RMB366 million.

Operating results by segment:

                Six-month period ended 30 June
                2013                        2012
                              Percentage                  Percentage
                Revenue       of total      Revenue       of total      Change
                              revenue                     revenue
                (RMB'000)     (%)           (RMB'000)     (%)           (%)
Engineering,
consulting and  2,263,920     10.6          1,677,822     9.4           34.9
licensing
EPC Contracting 10,594,811    49.7          8,331,527     46.6          27.2
Construction    8,098,838     38.0          7,495,236     41.9          8.1
Equipment       365,763       1.7           384,928       2.1           (5.0)
manufacturing
Subtotal        21,323,332    100.0         17,889,513    100.0
Total after
inter-segment   19,645,416                  16,888,392                  16.3
elimination
^(1)
(1) The total revenue means the aggregate revenue generated from each business
segment after inter-segment elimination to exclude the impact of inter-segment
transactions. Inter-segment elimination mainly arises from the inter-segment
sales to the EPC Contracting segment made by the construction and equipment
manufacturing segments.

Revenue by Industries

The Group derives its revenue mainly from services provided to clients in the
oil refining, petrochemical and new coal chemical industries. During the
Period, revenue from Oil Refining industry reached RMB5.130 billion and was
flat when compared to the same period last year. This was mainly due to the
fact that a number of large domestic projects were at their final stages and
new projects like the Kazakhstan Atyrau Refinery Oil Deep Processing Project
were at their initial stages of construction. Revenue from Petrochemicals
industry soared 27.2% year-on-year to approximately RMB8.626 billion, mainly
because a large proportion of revenue from contracts signed by the Company
with the industry after 2011 was realized in the Period. Revenue from New Coal
Chemicals industry surged 65.0% year-on-year to approximately RMB3.687 billion
mainly due to the significant growth in revenue from the projects such as the
Jingbian Coal Chemical Complex and the continued increase of uncompleted
contracts for new coal chemicals industry. Revenue from Other Industries
decreased to approximately RMB2.203 billion when compared to the same period
last year.

Revenue generated from different industries:

                   Six-month period ended 30 June
                   2013                    2012
                               Percentage              Percentage
                   Revenue     of total    Revenue     of total    Changes
                               revenue
                                                       revenue
                   (RMB'000)   (%)         (RMB'000)   (%)         (%)
Oil refining       5,129,647   26.1        5,449,534   32.3        (5.9)
Petrochemicals     8,625,631   43.9        6,783,294   40.2        27.2
New coal chemicals 3,686,688   18.8        2,234,112   13.2        65.0
Other industries   2,203,450   11.2        2,421,452   14.3        (9.0)
Subtotal           19,645,416  100.0       16,888,392  100.0       16.3

Revenue in the PRC and overseas

Revenue from the PRC for the Period increased 14.0% year-on-year to
approximately RMB16.190 billion, accounting for 82.4% of the Group's total
revenue. Meanwhile, overseas revenues grew 28.5% year-on-year to approximately
RMB3.455 billion, accounting for 17.6% of the Group's total revenue.

The increase in revenue from overseas operations was primarily generated from
the Kazakhstan Atyrau Refinery Aromatic Hydrocarbons Project, the Saudi Kayan
NDA Project, the SABIC Polyester Project in Saudi Arabia and the Singapore
Lubricant Grease Project. Over 70% of the Kazakhstan Atyrau Refinery Aromatic
Hydrocarbons Project has been completed, with engineering, procurement and
construction in full swing. The project entered its prime and a large
proportion of progress was made during the first half of this year. The Saudi
Kayan NDA Project and the SABIC Polyester Project have entered their final
stages, with most of the progress made within this period. The Singapore
Lubricant Grease Project was fully completed in the first half of the year,
contributing to the Group's overseas revenue growth.

Revenue sources by geographical locations:

         Six-month period ended 30 June
         2013                    2012
                     Percentage              Percentage
         Revenue     of total    Revenue     of total    Changes
                     revenue                 revenue
         (RMB'000)   (%)         (RMB'000)   (%)         (%)
PRC      16,189,958  82.4        14,200,348  84.1        14.0
Overseas 3,455,458   17.6        2,688,044   15.9        28.5
Subtotal 19,645,416  100.0       16,888,392  100.0       16.3

Capital Expenditures

The Group's capital expenditures were primarily spent on facility expansion,
technical upgrading and procurement of equipment. During the Period, the Group
spent about RMB209 million of its capital on the construction of production
bases and procurement of large-scale construction equipment, which was
considerably lower than the capital expenditure of RMB736 million in the same
period of the previous year, which was mainly spent on purchasing multiple
land use rights.

Industry and Business Outlook

The global economy recovered slowly in the first half of 2013. In contrast,
the overall performance of the Chinese economy remained steady while the
government took restructuring initiatives to promote the economic
transformation and industrial upgrade. Domestic GDP grew 7.6% during the
period. As the new government pursues the policy to improve the quality of
economic growth and efficiency, optimize the government structure, push for
decentralization, transform the government functions and economic structure,
the Chinese economy is expected to maintain steady development.

The global oil refining and chemical industries will remain a driver of global
economic development for a long period of time. They will continue their
growth momentum and offer long-term growth potential despite cyclical
fluctuations. Meanwhile, the scale of China's oil refining and chemical
engineering market will further expand in the future driven by the following
major factors:

  oEver increasing demand for oil products, robust demand for chemicals and
    the considerable room for the refining and chemicals industry to grow
    resulting from the urbanization process in China;
  oGrowth opportunities for engineering enterprises due to higher
    environmental protection standards, the need to save energy and reduce
    emissions, and industrial upgrade and agglomeration to eliminate obsolete
    production facilities;
  oIncreasing sophistication of technologies for the diversification of raw
    materials (e.g. the utilization of new coal chemicals and light
    hydrocarbon) in recent years under the government's support; the
    development and utilization of unconventional natural gas leading to lower
    product cost and a rosy outlook for chemicals industry;
  oDiversification in market players with more newcomers, who often rely
    heavily on project contracting service providers, thereby creating more
    opportunities for project contracting business;
  oContinuing growth of the overall investment scale of the oil refining and
    chemical engineering industry, which will directly stimulate the sustained
    growth of refining and chemical engineering industry.

Going forward, the Group will implement the following measures to enhance its
market leadership:

1.Increase synergies between its companies by: (1) encouraging its
    engineering and construction subsidiaries to carry out joint general
    contracting for projects in order to lower management costs; encouraging
    construction enterprises to contribute at pre-launch stages of projects to
    carry out constructability studies and create necessary conditions for
    subsequent construction; (2) strengthening its coordination in market
    development to promote orderly development and encourage healthy
    competition; assisting its subsidiaries in enhancing their efficiency of
    market development beyond existing sectors; (3) standardizing engineering
    and procurement, modularized construction to enhance work efficiency and
    lower costs; (4) establishing of HTC to further optimize resource
    allocation and adopting centralized management; (5) promoting lean
    management at Ningbo Tianyi Petrochemical, the only manufacturing
    enterprise under the Group, and assisting in its international expansion
    and future profitability.
2.Create an integrated value chain for the new coal chemical business and
    make it a driver of its future profit growth, leverage on its advantages
    in traditional engineering services to provide a full range of services to
    customers, including the licensing of process technology, engineering,
    procurement, construction and start-up services.
3.Increase investment in R&D with primary focus in the following areas: (1)
    the creation of a new coal chemical technological chain, (2) promotion of
    mutual technological advancement with SINOPEC, (3) development of patented
    technologies through win-win cooperation with others to enhance its
    production technologies, (4) leveraging on the Group's advantages in
    traditional petrochemical businesses to extend its reach to new resources
    and new energy sectors, (5) the use of Luoyang laboratory as an innovation
    base of the Group.

The Group will steadily expand into overseas markets under the development
strategy of "using the financing and technology-driven approach, smooth
construction, stepping in at the pre-launch stage of a project, strengthening
international cooperation, differentiation and competition at optimal
low-cost". Moreover, it will reinforce corporate management by establishing
modern human resources management systems and incentive mechanisms for
management and building an IT management platform, driving the sustainable
development of the Group.

-The End -

This press release is issued by PRChina Limited on behalf of SINOPEC
Engineering (Group) Co., Ltd.

About SINOPEC Engineering (Group) Co., Ltd.

SINOPEC Engineering (Group) Co., Ltd. ("SINOPEC SEG" or "the Company") is the
leading oil refining, petrochemical and new coal chemical engineering company
in the PRC. The Company's main business consists of engineering, consulting
and licensing, EPC Contracting, construction and equipment manufacturing.
According to ICIS Consulting, the Company ranked first both in 2010 and 2011
among all PRC Exploration and Design Enterprises providing services to oil
refining and chemical industries based on total revenue, and ranked among the
top 10 global contractors in 2011 based on revenue generated from services
provided to oil refining and chemical industries. Leveraging 60 years of
industry experience and continual innovation in specialized technologies, the
Company has developed the strongest execution capabilities in the PRC with
respect to engineering and constructing large-scale oil refining,
petrochemical and new coal chemical complexes and is highly competitive in the
international engineering market.

Disclaimer

This press release includes "forward-looking statements". All statements,
other than statements of historical facts that address activities, events or
developments that the Company expects or anticipates will or may occur in the
future (including but not limited to projections, targets, other estimates and
business plans) are forward-looking statements. The Company's actual results
or developments may differ materially from those indicated by these
forward-looking statements as a result of various factors and uncertainties,
including but not limited to the price fluctuation, possible changes in actual
demand, foreign exchange rate, market shares, competition, environmental
risks, possible changes to laws, finance and regulations, conditions of the
global economy and financial markets, political risks, possible delay of
projects, government approval of projects, cost estimates and other factors
beyond the Company's control. In addition, the Company makes the
forward-looking statements referred to herein as of today and undertakes no
obligation to update these statements.

Investor and Media Enquiries:

PRChina Limited

Henry Chik / Camille Xiong / Ivan Kau / David Shiu

Tel: (852) 2522 1838 / (852) 2522 1368

Fax: (852) 2521 9955

Email: hchik@prchina.com.hk / cxiong@prchina.com.hk / ikau@prchina.com.hk
/dshiu@prchina.com.hk

SOURCE SINOPEC Engineering (Group) Co., Ltd.