Sinopec Corp. Recorded Significant Earnings Growth in the Third Quarter

   Sinopec Corp. Recorded Significant Earnings Growth in the Third Quarter

PR Newswire

BEIJING, Oct. 29, 2013

BEIJING, Oct. 29, 2013 /PRNewswire/ --China Petroleum & Chemical Corporation
("Sinopec Corp." or "the Company") (CH: 600028; HKEX: 386; NYSE: SNP; LSE:
SNP) today announced its unaudited results for the nine months ended 30
September, 2013.

Financial Highlights:

  oIn accordance with the China Accounting Standards for Business Enterprises
    ("ASBE"), the Company's operating income for the first three quarters of
    2013 was RMB 2139.9 billion, up 5.7% over the same period of last year,
    and operating profit was RMB 74.71 billion, up 25.8% over the same period
    of last year. Net profit attributable to equity shareholders of the
    Company was RMB 51.6 billion for the three quarters, up 23% over the same
    period of last year. Net profit attributable for equity shareholders of
    the Company for the third quarter was RMB 22.18 billion, up 63.3% quarter
    on quarter. Basic earnings per share for the first three quarters were RMB
    0.445, up 19.6% over the same period of last year.
  oIn accordance with the International Financial Reporting Standards
    ("IFRS"), the Company's turnover and other revenue in the first three
    quarters of 2013 was RMB 2139.9 billion, up 5.7% over the same period of
    last year. Operating profit was RMB 78.29 billion, up 14.7% over the same
    period of last year. Profit attributable to equity shareholders of the
    Company was RMB 52.3 billion for the first three quarters, up 22.1% over
    the same period of last year. Profit attributable to equity shareholders
    of the Company was RMB 22.02 billion for the third quarter, up 61.7%
    quarter on quarter. Basic earnings per share for the first three quarters
    were RMB 0.451, up 19% over the same period of last year.

In the first three quarters of 2013, China's economy grew steadily with GDP up
by 7.7% over the same period of last year. Domestic demand for oil products
and chemical products continued to grow. The Chinese government further
improved the pricing mechanism for oil products by implementing an adjustment
of natural gas price and announcing the premium pricing policy for upgraded
quality oil products. Based on the macroeconomic trends and market demand, the
Company organised its operations with quality and efficiency being the top
priorities for growth. It also promoted structural adjustment and change in
the development model, while exercising strict control over costs and
expenditures. All of these efforts contributed to the significant growth in
operating results for the first three quarters of 2013.

RESULTS REVIEW

Exploration and Production Segment

In exploration, the Company optimized exploration areas and made major
breakthroughs in new blocks such as the Tarim Basin. The Company intensified
its progressive exploration and oil reserve evaluation. Seven projects,
including West Junggar, Tahe and East Shengli etc. as well as Daniudi Gasfield
development have all been progressing smoothly. The Company accelerated the
development of unconventional oil and gas and made major progress in the
Fuling shale gas project. Positive progress was also made in the Southeast
Sichuan marine facies shale gas evaluation. Development of coal-bed methane in
South Yanchuan are progressing smoothly, with its production also growing
steadily. During the first three quarters of 2013, the oil and gas production
of the Company reached 330.8 million barrels of oil equivalent, up by 4.0%
compared with the same period of 2012. However, due to factors such as the
fall in international crude oil prices, the Exploration & Production Segment
recorded an operating profit of RMB 46.74 billion, down by 15.5% compared with
the same period of 2012.

Refining Segment

The Company adjusted its product mix in response to changes in market demand
for domestic oil products, by producing more gasoline, jet fuel and other
high-value-added products that are well received in the market. The Company
optimized its operations through cost savings and efficiency improvements. The
Company made every effort to upgrade oil product quality and considerably
increased production of gasoline and diesel above GB IV standards, with an aim
to prepare for premium quality oil products supply. The Company also enhanced
the marketing of LPG, asphalt and paraffin by utilizing its advantage in
specialization. In the first three quarters of 2013, refinery throughput was
174.19 million tonnes, representing a growth of 6.4% over the same period of
last year. Benefiting from the government's implementation and improvement in
the pricing mechanism for oil products, the operating profit of the Refining
Segment swung into a profit of RMB 6.66 billion, as compared with an operating
loss in the same period of 2012. Refining margins significantly improved to
US$ 5.49/barrel, up 149.5% over the same period last year.

Marketing and Distribution Segment

In response to changes in supply and demand in the domestic market, and the
implementation of the newly-announced oil products pricing mechanism, the
Company endeavored to maximize its profitability and adjusted its marketing
strategies by adopting differentiated marketing tactics. While increasing
sales volume, the Company focused on the retail market and expanded retail
sales volume by offering specialised services. The Company expanded the
marketing of jet fuel and high standard oil products. It also strengthened
quality management to ensure oil product quality, and promoted new businesses
as well as non-fuel businesses, and actively explored the gas market. In the
first three quarters of 2013, total sales volume of oil products increased to
134.64 million tonnes, up by 4.9% over the same period of last year. Total
retail volume reached 84.82 million tonnes, representing an increase of 4.7%,
and sales of non-fuel businesses reached RMB 10 billion, an increase of 20.5%
compared with the same period of 2012. The operating profit of the Marketing
and Distribution Segment was RMB 27.03 billion, representing a decrease of
10.5% over the same period of last year.

Chemical Segment

The Company further optimized the feedstock mix and cut feedstock costs by
using a higher proportion of light feedstock. The Company optimized the
operation and upgraded the technical and economical indicators. The Company
strengthened its market analysis, the integration of R&D, production and
marketing; optimized operations and utilization of facilities; and improved
its product mix as well as promoted the development, production and sales of
new products. The Company also improved its marketing approach and customer
service, and reinforced supply-chain management. The Wuhan ethylene project
was put into trial operation. In the first three quarters of 2013, ethylene
production was 7.398 million tonnes, representing an increase of 5.3% compared
with the same period of 2012. During this period, although facing the
permissive market, the Company optimized the feedstock and product mix which
helped to improve the operational profit of the segment. The Chemicals Segment
recorded an operating loss of RMB 59 million in the first three quarters of
2013, representing an improvement of RMB 233 million as compared with the same
period of 2012.

Capital Expenditure

The Company's capital expenditure amounted to RMB 86.95 billion in the first
three quarters of 2013. Capital expenditure for the E&P segment was RMB 41.25
billion, mainly used for development in tight oil development in south Ordos,
heavy oil development in west Shengli at shallow stratus, new blocks in the
Tahe Oilfield, Yuanba and the Daniudi gas fields, and the Shandong LNG
project. Capital expenditure for the Refining Segment was RMB 12.71 billion,
used mainly for upgrading oil product quality and revamping projects in Wuhan,
Anqing and Maoming etc. In the Chemicals segment, RMB12.76 billion was used
for the construction of the Wuhan 800,000-tpa ethylene project, the Hubei
syngas-to-MEG project and the Hainan aromatics project. Capital expenditure
for Marketing and Distribution segment was RMB 17.36 billion, used mainly for
developing and revamping service stations (including gas stations), the
construction of refined oil product pipelines and depots, and for insuring
safety and improving the environment. The Company added 671 new service
stations (including gas stations) over the three quarters of 2013. A total of
RMB 2.86 billion was used for Corporate and Other purposes, such as for R&D
facilities and IT projects construction.

About Sinopec

Sinopec is one of the largest integrated energy and chemical companies with
upstream, midstream and downstream operations in China. Its principal
operations include: the exploration and production, pipeline transportation
and sales of petroleum and natural gas; the sales, storage and transportation
of petroleum products, petrochemical products, synthetic fiber, fertilizer and
other chemical products; import & export, as well as import and export agency
business of oil, natural gas, petroleum products, petrochemical and chemical
products, and other commodities and technologies; and research, development
and application of technologies and information.

Adhering to its corporate mission of "Enterprise development, Contribution to
the Country, Shareholder value creation, Social responsibility and Employee
wellbeing", Sinopec implements strategies of resources, markets, integration,
internationalization, differentiation and green low-carbon development with a
view to realize its vision of building a world first class energy and chemical
company.

Disclaimer

This press release includes "forward-looking statements". All statements,
other than statements of historical facts that address activities, events or
developments that Sinopec Corp. expects or anticipates will or may occur in
the future (including but not limited to projections, targets, reserve volume,
other estimates and business plans) are forward-looking statements. Sinopec
Corp.'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, results of oil
exploration, estimates of oil and gas reserves, 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 Sinopec Corp.'s control. In addition, Sinopec Corp.
makes the forward-looking statements referred to herein as of today and
undertakes no obligation to update these statements.

Investor Inquiries:     Media Inquiries:
Beijing
Tel: (8610) 5996 0028  Tel: (8610) 5996 0028
Fax: (8610) 5996 0386   Fax: (8610) 5996 0386
Email:ir@sinopec.com
Hong Kong
Tel: (852) 2824 2638   Tel: (852) 3512 5000
Fax: (852) 2824 3669    Fax: (852) 2259 9008
Email: ir@sinopechk.com Email: sinopec@brunswickgroup.com

SOURCE China Petroleum & Chemical Corporation