form6k.htm
 
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, 2016

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  ü                    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 ü                      

(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:

The first quarterly report for 2016 of China Petroleum & Chemical Corporation (the “Registrant”) and the appendix attached thereto, made by the Registrant on April 28, 2016.


 
 
 
The First Quarterly Report for 2016
 
 


 



 

China Petroleum & Chemical Corporation
The First Quarterly Report for 2016





 









 


28 April 2016
Beijing, China


 
1
 
The First Quarterly Report for 2016
 
 

1
Important notice

1.1
The Board of Directors, the Supervisory Board of China Petroleum & Chemical Corporation (“Sinopec Corp.” or the "Company") and its directors, supervisors and senior management warrant that there are no material omissions, misrepresentations or misleading statements contained in this report and severally and jointly accept full responsibility for the authenticity, accuracy and completeness of the information contained in this report.

1.2
The first quarterly report for 2016 was approved at the 6th meeting of the Sixth Session of the Board of Directors of Sinopec Corp. All the directors attended this meeting.

1.3
Mr. Wang Yupu, Chairman of the Board of Directors, Mr. Li Chunguang, Director and President, Ms. Wen Dongfen, Chief Financial Officer and Head of the Corporate Finance Department of Sinopec Corp. warrant the authenticity, accuracy and completeness of the financial statements contained in this quarterly report.

1.4
The financial statements in this quarterly report were not audited.

 
2
 
The First Quarterly Report for 2016
 
 

2
Basic information of Sinopec Corp.

2.1
Principal financial data and indicators

2.1.1
Principal financial data and indicators prepared in accordance with China Accounting Standards for Business Enterprises (ASBE)
Units: RMB million
 
As of 31 March 2016
As of 31 December 2015
Changes from the end of the preceding year to the end of the reporting period (%)
Total assets
1,397,688
1,443,129
(3.1)
Total equity attributable to equity shareholders of the Company
686,286
675,370
1.6

 
Three months
Changes over the same period of the preceding year (%)
2016
2015
Net cash flow from operating activities
34,348
6,682
414.0
 
Operating income
413,790
478,241
(13.5)
Net profit attributable to equity shareholders of the Company
6,185
1,685
267.1
Net profit attributable to equity shareholders of the Company excluding extraordinary gains and losses
6,404
1,336
379.3
Weighted average return on net assets (%)
0.91
0.27
0.64
 percentage points
Basic earnings per share (RMB)
0.051
0.014
264.3
Diluted earnings per share (RMB)
0.051
0.014
264.3
 
 
3
 
The First Quarterly Report for 2016
 
 
 
Extraordinary gain/loss items
During the reporting period
(gains)/losses（RMB million）
Net loss on disposal of non-current assets
5
Donations
6
Government grants
(229)
Loss on holding and disposal of various investments
155
Other extraordinary income and expenses, net
327
Subtotal
264
Tax effect
(31)
Total
233
Equity shareholders of the Company
219
Minority interests
14

2.1.2
Principal financial data and indicators prepared in accordance with International Financial Reporting standards (IFRS)
Units: RMB million
 
As of 31 March 2016
As of 31 December 2015
Changes from the end of the preceding year to the end of the reporting period (%)
Total assets
1,397,688
1,443,129
(3.1)
Total equity attributable to owners of the Company
684,972
674,029
1.6

 
Three months
Changes over the same period of the preceding year (%)
2016
2015
Net cash generated from operating activities
34,348
6,682
414.0
 
Operating profit
13,057
 5,153
153.4
Net profit attributable to owners of the Company
6,663
 2,172
206.8
Basic earnings per share (RMB)
 0.055
 0.018
205.6
Diluted earnings per share (RMB)
 0.055
0.018
205.6
Return on net assets (%)
0.97
0.32
0.65
percentage points

 
4
 
The First Quarterly Report for 2016
 
 

2.2
Total number of shareholders and top ten shareholders at the end of the reporting period
 
Total number of shareholders at the end of the reporting period
Total number of shareholders was 721,830, including 715,543 holders of domestic A shares and 6,287 holders of overseas H shares.
Top ten shareholders
Name of shareholders
Total number of shares held
Percentage
(%)
Number of shares subject to pledge or lock-ups
Nature of shareholder
China Petrochemical Corporation
85,792,671,101
70.86
0
State-owned share
HKSCC (Nominees) Limited 1
25,373,883,969
20.96
Unknown
H share
中国证券金融股份有限公司
1,895,769,371
1.57
0
A share
中央汇金资产管理有限责任公司
322,037,900
0.27
0
A share
国泰君安证券股份有限公司
134,485,406
0.11
0
A share
工银瑞信基金－工商银行－特定客户资产管理
115,357,299
0.10
0
A share
香港中央结算有限公司
100,393,717
0.08
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
79,473,080
0.07
0
A share
长江证券股份有限公司
64,288,824
0.05
0
A share
中国工商银行股份有限公司企业年金计划－中国建设银行股份有限公司
45,743,695
0.04
0
A share
Note 1
Sinopec Century Bright Capital Investment Limited, overseas wholly-owned subsidiary of China Petrochemical Corporation, holds 553,150,000 H shares, which is included in the total number of the shares held by HKSCC (Nominees) Limited.
 
 
5
 
The First Quarterly Report for 2016
 
 

2.3
Review of operating results

In the first quarter of 2016, the global economic recovery remained weak, and Chinese economy maintained steady growth with GDP up by 6.7%. International oil prices bottomed in January but remained at low level. Domestic apparent consumption of refined oil products grew by 4.0% over the same period last year, driven by the increase of gasoline and kerosene consumption partly offset by a decline in diesel consumption. Domestic ethylene equivalent consumption was flat compared with a year ago.

Focusing on growth quality and profitability, the Company intensified its evaluation of the macro-economy and market trends and actively responded to these changes. The Company emphasised on reform and innovation, stringent management and tight coordination of all aspects of work. In accordance with the ASBE and IFRS, net profit attributable to equity shareholders of the Company was RMB 6.19 billion and RMB 6.66 billion respectively in the first quarter.

Exploration and Production: Through projects optimization and implementation of a flexible investment decision-making mechanism in respond to oil price fluctuations, we reduced our high-cost oil production. In exploration, we actively carried forward high-efficiency exploration activities, making a number of discoveries in Sichuan Basin, Ordos Basin, and Central Tahe Basin. In development, we achieved steady progress in development of Fuling shale gas field (phase II), optimised development programs in mature oilfields and increased development in frontier acreages. In the first quarter, the oil and gas production of the Company was 114.7 million barrels of oil equivalent, declined by 2.7%, out of which crude oil output down by 9.3% while natural gas up by 16.7%, compared with the same period last year. Impacted by the sustained low crude oil prices, Exploration and Production Segment had an operating loss of RMB 12.53 billion.

Refining: the Company adjusted the product mix in response to market demand by increasing production of gasoline and kerosene, maintained safe and stable refinery operations and upgraded refined oil products quality as scheduled. We optimised resource allocation, controlled costs and took advantage of our strong economies of scale. By tapping our well-established advantages in specialisation, we improved our profit margins in LPG, etc. In the first quarter, refinery throughput decreased by 2.4% and refined oil products production dropped by 1.4%, among which gasoline up by 4.7%, jet fuel up by 4.5% and diesel down by 8.0% over the same period last year. Benefited by product mix optimisation and the refined oil product pricing mechanism improvement, Refining Segment had an operating profit of RMB 13.44 billion, a reversal from the loss-making situation in the same period last year.

Marketing and Distribution: in response to the changes in supply and demand of refined oil products, we optimised resource allocation and adjusted our marketing strategies and promoted the sales of high-octane gasoline and high-value-added products. In the transformation from a fuel supplier to a comprehensive service provider, we optimised marketing network and reinforced mutual promotion between fuel and non-fuel businesses. As a result, total retail volume and throughput per station sustained growth despite of intense market competition. In the first quarter, total sales volume of refined oil products was 47.21 million tonnes, up by 1.6% over the same period last year. Total domestic sales volume of refined oil products was 43.29 million tonnes, up by 3.0%, of which retail volume reached 29.66 million tonnes, up by 2.6% over the same period
 
 
6
 
The First Quarterly Report for 2016
 
 
 
last year. Transaction of non-fuel business reached RMB 8.91 billion, up by 41.4% compared with the same period last year. The operating profit of Marketing and Distribution Segment was RMB 7.69 billion, up by 45.6% compared with the same period last year.

Chemicals: the Company fine-tuned its feedstock mix to lower costs and enhanced the operations of our production facilities by adjusting utilisation rates based on marginal profitability, while keeping sustained safe and stable operations. We strengthened the links among research and development, production, marketing and sales of new products, and increased production of high-value-added products tailored to market demands. In the first quarter, ethylene production reached 2.823 million tonnes, up by 2.0% and chemical sales volume was 15.621 million tonnes, up by 6.7% over the same period last year. Benefited from feedstock mix and product slate adjustment, decreased feedstock costs and upgraded competitiveness of naphtha-based chemicals, the operating profit of Chemicals Segment was RMB 4.58 billion, up by 49.3% compared with the same period last year.

Summary of Principal Operating Results for the First Quarter
 
Operating data
Unit
For three-month period ended 31 March
Changes
(%)
2016
2015
Exploration and production
Oil and gas production1
million boe
114.68
117.82
(2.67)
Crude oil production
million barrels
79.42
87.55
(9.29)
China
million barrels
66.35
74.01
(10.35)
Overseas
million barrels
13.07
13.54
(3.47)
Natural gas production
billion cubic feet
211.36
181.06
16.73
Realized crude oil price
USD/barrel
27.06
46.22
(41.45)
Realized natural gas price
USD/thousand cubic feet
5.47
7.94
(31.11)
Refining2
Refinery throughput
million tonnes
57.18
58.58
(2.39)
Gasoline, diesel and kerosene production
million tonnes
36.33
36.85
(1.41)
Gasoline
million tonnes
13.92
13.29
4.74
Diesel
million tonnes
16.32
17.74
(8.00)
Kerosene incl. jet fuel
million tonnes
6.08
5.82
4.47
Light chemical feedstock
million tonnes
9.74
9.43
3.29
Light product yield
%
77.05
76.68
0.37
percentage points
Refining yield
%
94.93
94.69
0.24 percentage points
Marketing and Distribution
Total sales of refined oil products
million tonnes
47.21
46.49
1.55
Total domestic sales of refined oil products
million tonnes
43.29
42.05
2.95
Retail
million tonnes
29.66
28.90
2.63
 
 
7
 
The First Quarterly Report for 2016
 
 
 
Operating data
Unit
For three-month period ended 31 March
Changes
(%)
2016
2015
Exploration and production
Direct sales & Distribution
million tonnes
13.63
13.15
3.65
Total number of Sinopec-branded service stations3
stations
30,636
30,560
0.25
Company-operated
stations
30,623
30,547
0.25
Throughput per station4
tonnes
3,879
3,786
2.46
Chemicals2
Ethylene
thousand tonnes
2,823
2,768
1.99
Synthetic resin
thousand tonnes
3,840
3,786
1.43
Synthetic rubber
thousand tonnes
205
213
(3.76)
Monomers and polymers for synthetic fiber
thousand tonnes
2,328
2,128
9.40
Synthetic fiber
thousand tonnes
311
311
0
Note:
1.
Conversion: for domestic production of crude oil, 1 tonne = 7.1 barrels; for overseas production of crude oil, 1 tonne=7.21 barrels; for production of natural gas, 1 cubic meter = 35.31 cubic feet.
2.
Including 100% production of joint ventures.
3.
The number of service stations in 2015 was the number as of 31 December 2015.
4.
Throughput per station was annualized.

Capital expenditure: The Company’s capital expenditures were RMB 5.526 billion in the first quarter. Capital expenditures for exploration and production segment were RMB 1.339 billion, mainly for development in Fuling shale gas field, construction of LNG terminals in Guangxi and Tianjin, and construction of long-distance gas pipelines such as the Jinan-Qingdao gas pipeline (phase II), as well as development in overseas projects. Capital expenditures for refining segment were RMB 1.397 billion, mainly for gasoline and diesel quality upgrading projects and refinery revamping. Capital expenditures for marketing and distribution segment were RMB 1.225 billion, mainly for revamping service stations and building refined oil product pipelines, oil depots and storage facilities, as well as for hazard rectification. Capital expenditures for chemicals segment were RMB 1.533 billion, mainly for coal chemical projects, comprehensive utilisation of resources project and auxiliary facilities construction project.

 
8
 
The First Quarterly Report for 2016
 
 

3
Significant events

3.1
Significant changes in major items contained in the consolidated financial statements prepared in accordance with ASBE and the reasons for such changes.
 
Items of Consolidated Balance Sheet
As of 31
March
2016
As of 31 December
2015
Increase/(decrease)
Main reasons for changes
Amount
Percentage
RMB
million
RMB
million
RMB
million
(%)
Prepayments
3,880
2,919
961
32.9
Mainly due to the increase of prepayments on raw materials
Specific reserve
1,063
612
451
73.7
Mainly due to the provision of safety production fund

 
Items of consolidated income statement
For three-month period ended 31 March
Increase/(decrease)
Main reasons for changes
2016
 2015
Amount
Percentage
RMB
million
RMB
million
RMB
million
(%)
Loss from changes in fair value
(2)
(259)
257
(99.2)
Mainly due to fair value changes of derivatives embedded in A share convertible bonds of Sinopec Corp. in the same period last year, which has no impact in the current reporting period
Profit before taxation
12,206
2,930
9,276
316.6
Mainly due to the profit decrease from the up-stream segment offset by profit increase from mid- and down-stream segments
Income tax expense
3,181
950
2,231
234.8
Mainly due to the increase of the Company’s profit
 

Items of consolidated cash flow statement
For three-month period ended 31 March
Increase/(decrease)
Main reasons for changes
2016
 2015
Amount
Percentage
RMB
million
RMB
million
RMB
million
(%)
Net cash flow from operating activities
34,348
6,682
27,666
414.0
Mainly as a result of the profit increase as well as the Company’s control on net occupation of working capital
Cash received from returns on investments
3,120
388
2,732
704.1
Due to the recovery of entrusted loans within one year during the reporting period
Net cash received from the disposal of subsidiaries and other business entities
2,027
0
2,027
-
Mainly due to the cash received from disposal of Jingtian Co.
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
(18,961)
(33,417)
14,456
(43.3)
Due to the strict control of investments and the decrease in payments on prior year’s investments
Cash paid for acquisition of investments
(11,934)
(2,822)
(9,112)
322.9
Due to the increase of financial assets measured at fair value

 
9
 
The First Quarterly Report for 2016
 
 
 
Items of consolidated cash flow statement
For three-month period ended 31 March
Increase/(decrease)
Main reasons for changes
2016
 2015
Amount
Percentage
RMB
million
RMB
million
RMB
million
(%)
Cash received from capital contributions
72
105,089
(105,017)
(99.9)
Mainly due to the capital injection of RMB 105 billion to Sinopec Marketing Co. last year
Cash paid for dividends, profits distribution or interest
(3,379)
(1,144)
(2,235)
195.4
Mainly due to the paid dividends to minority shareholders of Sinopec Marketing Co.
 
3.2
Status of fulfilment of commitments undertaken by Sinopec Corp., shareholder and actual controller.

Background
Type of Undertaking
Party
Contents
Term for performance
Whether bears deadline or not
Whether strictly performed or not
Undertakings related to Initial Public Offerings (IPOs)   Initial Public Offering (IPO) China Petrochemical Corporation
1
Compliance with the connected transaction agreements;
   From 22 June 2001   No   Yes
2
Solving the issues regarding the legality of land-use rights certificates and property ownership rights certificates within a specified period of time;
3
Implementation of the Reorganization Agreement (please refer to the definition of “Reorganization Agreement” in the H share prospectus of Sinopec Corp.);
4
Granting licenses for intellectual property rights;
5
Avoiding competition within the same industry; and
6
Abandonment of business competition and conflicts of interest with Sinopec Corp.
Other undertakings
Other
China Petrochemical Corporation
China Petrochemical Corporation would dispose of its minor remaining chemicals business within five years in order to avoid competition with Sinopec Corp. in the chemicals business.
Within five years, commencing 15 March 2012
Yes
Yes
Other undertakings
Other
China Petrochemical Corporation
Given that China Petrochemical Corporation engages in the same or similar businesses as Sinopec Corp. with regard to the exploration and production of overseas petroleum and natural gas, China Petrochemical Corporation hereby grants a 10-year option to Sinopec Corp. with the following provisions: (i) after a thorough analysis from political, economic and other perspectives, Sinopec Corp. is entitled to require China Petrochemical Corporation to sell its overseas oil and gas assets owned as of the date of the undertaking and still in its possession upon Sinopec Corp.’s exercise of the option to Sinopec Corp.; (ii) in relation to the overseas oil and gas assets acquired by China Petrochemical Corporation after the issuance of the undertaking, within 10 years of the
10 years after 29 April 2014 or the date when Sinopec Group acquires the assets
Yes
Yes
 
 
10
 
The First Quarterly Report for 2016
 
 
 
Background
Type of Undertaking
Party
Contents
Term for performance
Whether bears deadline or not
Whether strictly performed or not
     
completion of such acquisition, after a thorough analysis from political, economic and other perspectives, Sinopec Corp. is entitled to require China Petrochemical Corporation to sell these assets to Sinopec Corp.. China Petrochemical Corporation undertakes to transfer the assets as required by Sinopec Corp. under aforesaid items (i) and (ii) to Sinopec Corp., provided that the exercise of such option complies with applicable laws and regulations, contractual obligations and other procedural requirements.
      

As of the end of the reporting period, Sinopec Corp. had no undertakings in respect of profits, asset injections or asset restructuring that had not been fulfilled, nor did Sinopec Corp. make any profit forecast in relation to any asset or project.

3.3
On 13 January 2016, the National Development and Reform Commission announced the Notice on Further Improving the Pricing Mechanism of Refined Oil Products, stating that when benchmark international crude oil price for domestic refined oil product price is lower than USD 40 per barrel, the domestic refined oil product price will not be adjusted downward further. The unadjusted amount will be put into a risk reserve fund. The fund will mainly be used for energy conservation, emission reduction, oil product quality upgrading and oil supply security upon approval by the government. As of the date of this quarterly report, the specific management measures have not been announced yet, and the Company has not withdrawn any risk reserve.

3.4
This quarterly results announcement is published in both Chinese and English languages. In the event of any inconsistency between the two versions, the Chinese version shall prevail.

 
 
 
By Order of the Board
 
Chairman
 
Wang Yupu
 
28 April 2016


 
11
 
The First Quarterly Report for 2016
 
 

4.
Appendix
 
4.1
Quarterly financial statements prepared under China Accounting Standards for Business Enterprises (ASBE)

Consolidated Balance Sheet
as at 31 March 2016
Prepared by: China Petroleum & Chemical Corporation
Units: million    Currency: RMB    Type: unaudited
Items
At 31 March 2016
At 31 December 2015
Current assets:
    
Cash at bank and on hand
63,889
68,557
Bills receivable
12,085
10,949
Accounts receivable
39,959
56,126
Prepayments
3,880
2,919
Other receivables
16,899
21,452
Inventories
138,540
145,498
Other current assets
32,297
26,904
Total current assets
307,549
332,405
Non-current assets:
  
　
Available-for-sale financial assets
10,281
10,326
Long-term equity investments
85,256
82,970
Fixed assets
717,052
732,577
Construction in progress
145,745
152,276
Intangible assets
81,151
81,081
Goodwill
6,300
6,271
Long-term deferred expenses
13,321
13,919
Deferred tax assets
7,687
7,469
Other non-current assets
23,346
23,835
Total non-current assets
1,090,139
1,110,724
Total assets
1,397,688
1,443,129
Current liabilities:
  
　
Short-term loans
65,404
74,729
Bills payable
4,570
3,566
Accounts payable
117,975
130,446
Advances from customers
88,080
92,649
Employee benefits payable
2,736
1,185
Taxes payable
26,632
32,473
Other payables
60,901
86,317
 
 
12
 
The First Quarterly Report for 2016
 
 
 
Short-term debentures payable
30,000
30,000
Non-current liabilities due within one year
12,344
11,277
Total current liabilities
408,642
462,642
Non-current liabilities:
  
　
Long-term loans
54,499
56,493
Debentures payable
83,169
83,253
Provisions
33,646
33,186
Deferred tax liabilities
7,962
8,259
Other non-current liabilities
13,265
13,673
Total non-current liabilities
192,541
194,864
Total liabilities
601,183
657,506
Shareholders’ equity:
    
Share capital
121,071
121,071
Capital reserve
119,410
119,408
Other comprehensive income
(3,706)
(7,984)
Specific reserve
1,063
612
Surplus reserves
196,640
196,640
Retained earnings
251,808
245,623
Total equity attributable to shareholders of the Company
686,286
675,370
Minority interests
110,219
110,253
Total shareholders’ equity
796,505
785,623
Total liabilities and shareholders’ equity
1,397,688
1,443,129

Wang Yupu
  
Li Chunguang
  
Wen Dongfen
Chairman
(Legal representative)
  
President
  
Chief Financial Officer
 
 
13
 
The First Quarterly Report for 2016
 
 

Balance Sheet
as at 31 March 2016
Prepared by: China Petroleum & Chemical Corporation
Units: million     Currency: RMB     Type: unaudited
Items
At 31 March 2016
At 31 December 2015
Current assets:
    
Cash at bank and on hand
35,847
46,453
Bills receivable
547
540
Accounts receivable
26,525
29,512
Prepayments
1,768
1,296
Other receivables
53,603
64,620
Inventories
40,958
46,029
Other current assets
47,159
36,559
Total current assets
206,407
225,009
Non-current assets:
  
　
Available-for-sale financial assets
297
297
Long-term equity investments
220,554
219,230
Fixed assets
429,946
439,477
Construction in progress
66,348
72,763
Intangible assets
8,289
8,397
Long-term deferred expenses
1,861
2,154
Deferred tax assets
498
0
Other non-current assets
12,179
11,959
Total non-current assets
739,972
754,277
Total assets
946,379
979,286
Current liabilities:
  
　
Short-term loans
31,273
32,517
Bills payable
2,003
1,852
Accounts payable
79,163
85,182
Advances from customers
2,589
3,151
Employee benefits payable
1,155
290
Taxes payable
14,447
20,832
Other payables
68,210
86,427
Short-term debentures payable
30,000
30,000
Non-current liabilities due within one year
6,351
5,352
Total current liabilities
235,191
265,603
Non-current liabilities:
  
　
Long-term loans
52,545
54,526
 
 
14
 
The First Quarterly Report for 2016
 
 
 
Debentures payable
65,500
65,500
Provisions
29,418
28,968
Deferred tax liabilities
0
177
Other non-current liabilities
2,182
2,238
Total non-current liabilities
149,645
151,409
Total liabilities
384,836
417,012
Shareholders’ equity:
  
　
Share capital
121,071
121,071
Capital reserve
68,716
68,716
Other comprehensive income
694
(145)
Specific reserve
548
313
Surplus reserves
196,640
196,640
Retained earnings
173,874
175,679
Total shareholders’ equity
561,543
562,274
Total liabilities and shareholders’ equity
946,379
979,286
 
Wang Yupu
  
Li Chunguang
  
Wen Dongfen
Chairman
(Legal representative)
  
President
  
Chief Financial Officer
 
 
15
 
The First Quarterly Report for 2016
 
 

Consolidated Income Statement
for the three-month periods ended 31 March 2016
Prepared by: China Petroleum & Chemical Corporation
Units: million     Currency: RMB     Type: unaudited
Items
Three-month periods ended 31 March 2016
Three-month periods ended 31 March 2015
I. Total operating income
413,790
478,241
II. Total operating costs
402,810
476,589
Including: Operating costs
313,289
385,281
Sales taxes and surcharges
55,099
58,830
Selling and distribution expenses
11,858
10,961
General and administrative expenses
18,539
16,846
Financial expenses
1,826
2,409
Exploration expenses, including dry holes
2,152
2,775
Impairment losses
47
(513)
Add: Loss from changes in fair value
(2)
(259)
Investment income
1,336
1,065
III. Operating profit
12,314
2,458
Add: Non-operating income
371
876
Less: Non-operating expenses
479
404
IV. Profit before taxation
12,206
2,930
Less: Income tax expense
3,181
950
V. Net profit
9,025
1,980
Attributable to:
 
　
Equity shareholders of the Company
6,185
1,685
Minority interests
2,840
295
VI. Total other comprehensive income
1,424
2,714
Items that may be reclassified subsequently to profit or loss (net of tax and after reclassification adjustments):
  
　
Cash flow hedges
954
2,674
Available-for-sale financial assets
1
0
Share of other comprehensive income/(loss) of associates and jointly controlled entities
22
(100)
Foreign currency translation differences
447
140
VII. Total comprehensive income
10,449
4,694
Attributable to:
  
　
 
 
16
 
The First Quarterly Report for 2016
 
 
 
Equity shareholders of the Company
10,463
4,826
Minority interests
(14)
(132)
VIII. Earnings per share:
    
(i) Basic earnings per share (RMB)
0.051
0.014
(ii) Diluted earnings per share (RMB)
0.051
0.014

Wang Yupu
  
Li Chunguang
  
Wen Dongfen
Chairman
(Legal representative)
  
President
  
Chief Financial Officer
 
 
17
 
The First Quarterly Report for 2016
 
 

Income Statement
for the three-month periods ended 31 March 2016
Prepared by: China Petroleum & Chemical Corporation
Units: million     Currency: RMB     Type: unaudited
Items
Three-month periods ended 31 March 2016
Three-month periods ended 31 March 2015
I. Operating income
168,063
215,140
Less: Operating costs
117,829
164,590
Sales taxes and surcharges
39,828
41,923
Selling and distribution expenses
731
607
General and administrative expenses
10,202
9,426
Financial expenses
1,210
2,566
Exploration expenses, including dry holes
2,152
2,765
Impairment losses
20
101
Add: Loss from changes in fair value
0
(259)
Investment income
1,637
1,735
II. Operating profit
(2,272)
(5,362)
Add: Non-operating income
174
527
Less: Non-operating expenses
264
221
III. Profit before taxation
(2,362)
(5,056)
Less: Income tax expense
(557)
(1,557)
IV. Net profit
(1,805)
(3,499)
V. Total other comprehensive income
839
(434)
Items that may be reclassified subsequently to profit or loss (net of tax and after reclassification adjustments):
  
　
Cash flow hedges
847
(417)
Share of other comprehensive loss of associates and jointly controlled entities
(8)
(17)
VI. Total comprehensive income
(966)
(3,933)

Wang Yupu
  
Li Chunguang
  
Wen Dongfen
Chairman
(Legal representative)
  
President
  
Chief Financial Officer
 
 
18
 
The First Quarterly Report for 2016
 
 

Consolidated Cash Flow Statement
for the three-month periods ended 31 March 2016
Prepared by: China Petroleum & Chemical Corporation
Units: million     Currency: RMB     Type: unaudited
Items
Three-month periods ended 31 March 2016
Three-month periods ended 31 March 2015
I. Cash flows from operating activities:
    
Cash received from sale of goods and rendering of services
493,549
550,150
Refund of taxes and levies
403
220
Other cash received relating to operating activities
17,858
30,228
Sub-total of cash inflows
511,810
580,598
Cash paid for goods and services
(355,115)
(444,929)
Cash paid to and for employees
(13,296)
(12,612)
Payments of taxes and levies
(84,447)
(78,133)
Other cash paid relating to operating activities
(24,604)
(38,242)
Sub-total of cash outflows
(477,462)
(573,916)
Net cash flow from operating activities
34,348
6,682
II. Cash flows from investing activities:
    
Cash received from disposal of investments
3,120
388
Cash received from returns on investments
360
274
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
63
57
Other cash received relating to investing activities
487
929
Net cash received from the disposal of subsidiaries and other business entities
2,027
0
Sub-total of cash inflows
6,057
1,648
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
(18,961)
(33,417)
Cash paid for acquisition of investments
(11,934)
(2,822)
Other cash paid relating to investing activities
(5)
(2,064)
Sub-total of cash outflows
(30,900)
(38,303)
 
 
19
 
The First Quarterly Report for 2016
 
 
 
Net cash flow from investing activities
(24,843)
(36,655)
III. Cash flows from financing activities:
    
Cash received from capital contributions
72
105,089
Including: Cash received from minority shareholders’ capital contributions to subsidiaries
2
105,089
Cash received from borrowings
147,150
326,634
Sub-total of cash inflows
147,222
431,723
Cash repayments of borrowings
(157,930)
(337,583)
Cash paid for dividends, profits distribution or interest
(3,379)
(1,144)
Including: Subsidiaries’ cash payments for distribution of dividends or profits to minority shareholders
(2,253)
(134)
Sub-total of cash outflows
(161,309)
(338,727)
Net cash flow from financing activities
(14,087)
92,996
IV. Effects of changes in foreign exchange rate
(88)
(271)
V. Net (decrease)/increase in cash and cash equivalents
(4,670)
62,752
Add: Cash and cash equivalents at 1 January
67,824
9,355
VI. Cash and cash equivalents at 31 March
63,154
72,107

Wang Yupu
  
Li Chunguang
  
Wen Dongfen
Chairman
(Legal representative)
  
President
  
Chief Financial Officer


 
20
 
The First Quarterly Report for 2016
 
 

Cash Flow Statement
for the three-month periods ended 31 March 2016
Prepared by: China Petroleum & Chemical Corporation
Units: million     Currency: RMB     Type: unaudited
Items
Three-month periods ended 31 March 2016
Three-month periods ended 31 March 2015
I. Cash flows from operating activities:
    
Cash received from sale of goods and rendering of services
200,810
243,634
Refund of taxes and levies
281
88
Other cash received relating to operating activities
6,597
25,269
Sub-total of cash inflows
207,688
268,991
Cash paid for goods and services
(120,444)
(181,025)
Cash paid to and for employees
(7,913)
(8,044)
Payments of taxes and levies
(53,848)
(46,063)
Other cash paid relating to operating activities
(18,126)
(14,413)
Sub-total of cash outflows
(200,331)
(249,545)
Net cash flow from operating activities
7,357
19,446
II. Cash flows from investing activities:
    
Cash received from disposal of investments
1,704
77,824
Cash received from returns on investments
6,243
957
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
507
1,675
Net cash received from the disposal of subsidiaries and other business entities
2,027
0
Other cash received relating to investing activities
219
143
Sub-total of cash inflows
10,700
80,599
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
(11,065)
(20,959)
Cash paid for acquisition of investments
(14,899)
(10,301)
Sub-total of cash outflows
(25,964)
(31,260)
Net cash flow from investing activities
(15,264)
49,339
III. Cash flows from financing activities:
    
Cash received from borrowings
64,441
65,385
Sub-total of cash inflows
64,441
65,385
 
 
21
 
The First Quarterly Report for 2016
 
 
 
Cash repayments of borrowings
(66,683)
(104,649)
Cash paid for dividends or interest
(457)
(1,420)
Sub-total of cash outflows
(67,140)
(106,069)
Net cash flow from financing activities
(2,699)
(40,684)
IV. Net (decrease)/increase in cash and cash equivalents
(10,606)
28,101
Add:Cash and cash equivalents at 1 January
46,453
1,804
V. Cash and cash equivalents at 31 March
35,847
29,905

Wang Yupu
  
Li Chunguang
  
Wen Dongfen
Chairman
(Legal representative)
  
President
  
Chief Financial Officer

 
22
 
The First Quarterly Report for 2016
 
 
 

Segment Reporting
for the three-month periods ended 31 March 2016
Prepared by: China Petroleum & Chemical Corporation
Units: million     Currency: RMB     Type: unaudited
Items
Three-month periods ended 31 March 2016
Three-month periods ended 31 March 2015
Income from principal operations
    
Exploration and production
    
External sales
11,542
13,839
Inter-segment sales
10,413
18,220
Subtotal
21,955
32,059
Refining
    
External sales
22,592
29,835
Inter-segment sales
164,400
200,506
Subtotal
186,992
230,341
Marketing and distribution
    
External sales
237,058
268,841
Inter-segment sales
708
836
Subtotal
237,766
269,677
Chemicals
    
External sales
57,988
63,340
Inter-segment sales
8,612
9,864
Subtotal
66,600
73,204
Corporate and others
    
External sales
74,389
93,489
Inter-segment sales
59,029
79,913
Subtotal
133,418
173,402
Elimination of inter-segment sales
(243,162)
(309,339)
Consolidated income from principal operations
403,569
469,344
Income from other operations
    
Exploration and production
1,409
1,594
Refining
1,016
1,033
Marketing and distribution
4,745
4,097
Chemicals
2,704
1,900
Corporate and others
347
273
Consolidated income from other operations
10,221
8,897
Consolidated operating income
413,790
478,241
 
23
 
The First Quarterly Report for 2016
 
 

Operating profit/(loss)
    
By segment
    
Exploration and production
(12,458)
(1,285)
Refining
13,115
(4,080)
Marketing and distribution
7,653
5,137
Chemicals
4,514
2,963
Corporate and others
1,152
344
Elimination
(1,170)
982
Total segment operating profit
12,806
4,061
Investment income/(loss)
    
Exploration and production
(397)
(273)
Refining
271
33
Marketing and distribution
232
148
Chemicals
1,076
571
Corporate and others
154
586
Total segment investment income
1,336
1,065
Financial expenses
(1,826)
(2,409)
Loss from changes in fair value
(2)
(259)
Operating profit
12,314
2,458
Add: Non-operating income
371
876
Less: Non-operating expenses
479
404
Profit before taxation
12,206
2,930
 
 
24
 
The First Quarterly Report for 2016
 
 
 
4.2
Quarterly financial statements prepared under International Financial Reporting Standards (IFRS)

Consolidated Income Statement
for the three-month periods ended 31 March 2016
Prepared by: China Petroleum & Chemical Corporation
Units: million     Currency: RMB     Type: unaudited
Items
Three-month periods ended 31 March 2016
Three-month periods ended 31 March 2015
Turnover and other operating revenues
    
Turnover
403,569
469,344
Other operating revenues
10,221
8,897
Subtotal
413,790
478,241
Operating expenses
    
Purchased crude oil, products and operating supplies and expenses
(287,625)
(358,898)
Selling, general and administrative expenses
(16,368)
(15,550)
Depreciation, depletion and amortization
(25,284)
(23,753)
Exploration expenses, including dry holes
(2,152)
(2,775)
Personnel expenses
(13,885)
(13,684)
Taxes other than income tax
(55,099)
(58,830)
Other operating (expense)/income, net
(320)
402
Total operating expenses
(400,733)
(473,088)
Operating profit
13,057
5,153
Finance costs
    
Interest expense
(2,509)
(2,379)
Interest income
667
421
Loss on embedded derivative component of the convertible bonds
0
(259)
Foreign currency exchange income/(loss), net
16
(451)
Net finance costs
(1,826)
(2,668)
Investment income
35
12
Share of profits less losses from associates and joint ventures
1,476
1,053
Profit before taxation
12,742
3,550
Tax expense
(3,181)
(950)
Profit for the period
9,561
2,600
 
 
25
 
The First Quarterly Report for 2016
 
 
 
Attributable to：
    
Owners of the Company
6,663
2,172
Non-controlling interests
2,898
428
Profit for the period
9,561
2,600
Earnings per share
    
Basic earnings per share (RMB)
0.055
0.018
Diluted earnings per share (RMB)
0.055
0.018
 
 
26
 
The First Quarterly Report for 2016
 
 

Consolidated Statement of Comprehensive Income
for the three-month periods ended 31 March 2016
Prepared by: China Petroleum & Chemical Corporation
Units: million     Currency: RMB     Type: unaudited
Items
Three-month periods ended 31 March 2016
Three-month periods ended 31 March 2015
Profit for the period
9,561
2,600
Total other comprehensive income
1,424
2,714
Items that may be reclassified subsequently to profit or loss (net of tax and after reclassification adjustments):
    
Cash flow hedges
954
2,674
Available-for-sale securities
1
0
Foreign currency translation differences
447
140
Share of other comprehensive income/(loss) of associates and joint ventures
22
(100)
Total comprehensive income
10,985
5,314
Attributable to:
    
Owners of the Company
10,941
5,313
Non-controlling interests
44
1
 
 
27
 
The First Quarterly Report for 2016
 
 

Consolidated Balance Sheet
as at 31 March 2016
Prepared by: China Petroleum & Chemical Corporation
Units: million     Currency: RMB     Type: unaudited
Items
At 31 March 2016
At 31 December 2015
Non-current assets:
    
Property, plant and equipment, net
717,052
732,577
Construction in progress
145,745
152,276
Goodwill
6,300
6,271
Interest in associates
40,186
39,652
Interest in joint ventures
45,070
43,318
Available-for-sale financial assets
10,281
10,326
Deferred tax assets
7,687
7,469
Lease prepayments
51,539
51,044
Long-term prepayments and other non-current  assets
66,279
67,791
Total non-current assets
1,090,139
1,110,724
Current assets:
  
　
Cash and cash equivalents
63,154
67,824
Time deposits with financial institutions
735
733
Trade accounts receivable
39,959
56,126
Bills receivable
12,085
10,949
Inventories
138,540
145,498
Prepaid expenses and other current assets
53,076
51,275
Total current assets
307,549
332,405
Current liabilities:
  
　
Short-term debts
74,845
71,517
Loans from Sinopec Group Company and fellow subsidiaries
32,324
43,929
Trade accounts payable
117,975
130,446
Bills payable
4,570
3,566
Accrued expenses and other payables
178,808
212,136
Income tax payable
120
1,048
Total current liabilities
408,642
462,642
Net current liabilities
101,093
130,237
Total assets less current liabilities
989,046
980,487
Non-current liabilities:
  
　
Long-term debts
93,428
95,446
 
 
28
 
The First Quarterly Report for 2016
 
 

Loans from Sinopec Group Company and fellow subsidiaries
44,240
44,300
Deferred tax liabilities
7,962
8,259
Provisions
33,646
33,186
Other long-term liabilities
14,652
15,077
Total non-current liabilities
193,928
196,268
Total net assets
795,118
784,219
Equity:
  
　
Share capital
121,071
121,071
Reserves
563,901
552,958
Total equity attributable to owners of the Company
684,972
674,029
Non-controlling interests
110,146
110,190
Total equity
795,118
784,219

 
29
 
The First Quarterly Report for 2016
 
 
 
Consolidated Statement of Cash Flows
for the three-month periods ended 31 March 2016
Prepared by: China Petroleum & Chemical Corporation
Units: million     Currency: RMB     Type: unaudited
Items
Three-month periods ended 31 March 2016
Three-month periods ended 31 March 2015
Net cash generated from operating activities(a)
34,348
6,682
Investing activities
    
Capital expenditure
(17,482)
(31,772)
Exploratory wells expenditure
(1,479)
(1,645)
Purchase of investments, investments in associates and investments in joint ventures
(11,934)
(2,822)
Proceeds from disposal of investments and investments in associates, net
5,147
41
Proceeds from disposal of property, plant, equipment and other non-current assets
63
57
Increase in time deposits with maturities over three months
(2)
(1,094)
Interest received
484
306
Investment and dividend income received
360
274
Net cash used in investing activities
(24,843)
(36,655)
Financing activities
    
Proceeds from bank and other loans
147,150
326,634
Repayments of bank and other loans
(157,930)
(337,583)
Distributions by subsidiaries to non-controlling interests
(2,253)
(134)
Contributions to subsidiaries from non-controlling interests
72
105,089
Interest paid
(1,126)
(1,010)
Net cash (used in)/generated from financing activities
(14,087)
92,996
Net (decrease)/increase in cash and cash equivalents
(4,582)
63,023
Cash and cash equivalents at 1 January
67,824
9,355
Effect of foreign currency exchange rate changes
(88)
(271)
Cash and cash equivalents at 31 March
63,154
72,107

 
30
 
The First Quarterly Report for 2016
 
 


Note to consolidated statement of Cash Flows

(a) Reconciliation of profit before taxation to net cash generated from operating activities
Items
Three-month periods ended 31 March 2016
Three-month periods ended 31 March 2015
Operating activities
    
Profit before taxation
12,742
3,550
Adjustments for:
    
Depreciation, depletion and amortisation
25,284
23,753
Dry hole costs written off
1,636
1,889
Share of profits from associates and joint ventures
(1,476)
(1,053)
Investment income
(35)
(12)
Interest income
(667)
(421)
Interest expense
2,509
2,379
Loss on foreign currency exchange rate changes and derivative financial instruments
118
539
Loss on disposal of property, plant, equipment and other non-current assets, net
5
23
Impairment losses /(reversal) on assets
47
(513)
Loss on embedded derivative component of the convertible bonds
0
259
Operating profit before change of operating capital
40,163
30,393
Accounts receivable and other current assets
16,637
30,550
Decrease of inventories
6,937
28,508
Accounts payable and other current liabilities
(24,748)
(79,856)
Subtotal
38,989
9,595
Income tax paid
(4,641)
(2,913)
Net cash generated from operating activities
34,348
6,682

 
31
 
The First Quarterly Report for 2016
 
 
 
Segment Reporting
for the three-month periods ended 31 March 2016
Prepared by: China Petroleum & Chemical Corporation
Units: million     Currency: RMB     Type: unaudited
Information of the Group’s reportable segments is as follows:
Items
Three-month periods ended 31 March 2016
Three-month periods ended 31 March 2015
Turnover
    
Exploration and production
    
External sales
11,542
13,839
Inter-segment sales
10,413
18,220
Subtotal
21,955
32,059
Refining
    
External sales
22,592
29,835
Inter-segment sales
164,400
200,506
Subtotal
186,992
230,341
Marketing and distribution
    
External sales
237,058
268,841
Inter-segment sales
708
836
Subtotal
237,766
269,677
Chemicals
    
External sales
57,988
63,340
Inter-segment sales
8,612
9,864
Subtotal
66,600
73,204
Corporate and others
    
External sales
74,389
93,489
Inter-segment sales
59,029
79,913
Subtotal
133,418
173,402
Elimination of inter-segment sales
(243,162)
(309,339)
Turnover
403,569
469,344
Other operating revenues
    
Exploration and production
1,409
1,594
Refining
1,016
1,033
Marketing and distribution
4,745
4,097
Chemicals
2,704
1,900
Corporate and others
347
273
Other operating revenues
10,221
8,897
Turnover and other operating revenues
413,790
478,241

 
32
 
The First Quarterly Report for 2016
 
 
 
Result
    
Operating profit/(loss)
    
By segment
    
Exploration and production
(12,526)
(1,232)
Refining
13,443
(3,355)
Marketing and distribution
7,690
5,281
Chemicals
4,581
3,069
Corporate and others
1,039
408
Elimination
(1,170)
982
Total segment operating profit
13,057
5,153
Share of profits / (losses) from associates and joint ventures
    
Exploration and production
(406)
(270)
Refining
275
33
Marketing and distribution
219
136
Chemicals
1,072
571
Corporate and others
316
583
Aggregate share of profits from associates and joint ventures
1,476
1,053
Investment income
    
Exploration and production
9
(3)
Refining
(4)
0
Marketing and distribution
13
12
Chemicals
4
0
Corporate and others
13
3
Aggregate investment income
35
12
Net finance costs
(1,826)
(2,668)
Profit before taxation
12,742
3,550

 
33
 
The First Quarterly Report for 2016
 
 
 
4.3
Differences between Consolidated Financial Statements prepared in accordance with the accounting policies complying with ASBE 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 ASBE 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 ASBE, grants from the government are credited to capital reserve if required by relevant governmental regulations. Under IFRS, government grants relating to the purchase of fixed assets are recognized as deferred income and are transferred to the income statement over the useful life of these assets.

(ii) Safety Production Fund

Under ASBE, safety production fund should be recognized in profit or loss with a corresponding increase in reserve according to PRC regulations. Such reserve is reduced for expenses incurred for safety production purposes or, when safety production related fixed assets are purchased, is reduced by the purchased cost with a corresponding increase in the accumulated depreciation. Such fixed assets are not depreciated thereafter. Under IFRS, payments are expensed as incurred, or capitalised as fixed assets and depreciated according to applicable depreciation methods.

Effects of major differences between the net profit under ASBE 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 periods ended 31 March 2016
Three-month periods ended 31 March 2015
Net profit under ASBE
9,025
1,980
Adjustments:
    
Government grants (i)
30
27
Safety production fund (ii)
506
593
Profit for the period under IFRS
9,561
2,600

 
34
 
The First Quarterly Report for 2016
 
 
 
Effects of major differences between the shareholders’ equity under ASBE and the total equity under IFRS are analysed as follows:

Items
At 31 March 2016
At 31 December 2015
Shareholders’ equity under ASBE
796,505
785,623
Adjustments:
    
Government grants(i)
(1,387)
(1,404)
Safety production fund (ii)
0
0
Total equity under IFRS
795,118
784,219

 
35
 
 
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: Secretary to the Board of Directors



Date: April 29, 2016