Sinopec Corp.(00386)2023-08-27 10:13Financial Performance - Operating revenue for the first half of 2023 was RMB 1,593,682 million, a decrease of 1.1% compared to RMB 1,612,126 million in the same period of 2022[6]. - Net profit attributable to shareholders of the parent company was RMB 35,111 million, down 20.1% from RMB 43,920 million in the first half of 2022[6]. - Basic earnings per share for the first half of 2023 were RMB 0.293, a decrease of 19.3% compared to RMB 0.363 in the same period of 2022[7]. - The weighted average return on net assets was 4.43%, down 1.18 percentage points from 5.61% in the first half of 2022[7]. - The company reported a net profit attributable to shareholders of RMB 36,122 million, down 19.4% from the previous year[12]. - The company reported a net profit of RMB 4.16 billion for the first half of 2023, a decrease of 18.5% year-on-year[30]. - The company reported a net profit attributable to shareholders of RMB 33,655 million for the first half of 2023, a decrease of RMB 9,695 million compared to the same period last year[140]. Cash Flow and Liquidity - Net cash flow from operating activities increased significantly to RMB 27,562 million, a 457.1% increase from RMB 4,947 million in the same period of 2022[6]. - The cash received from tax refunds increased by 73.7% to RMB 5,978 million, attributed to higher VAT refunds on imported LNG[11]. - The company’s cash and cash equivalents at the end of the first half of 2023 amounted to RMB 94.9 billion[63]. - Total cash and cash equivalents at the end of the period were RMB 94,874 million, down from RMB 139,178 million at the end of June 2022[148]. - The net increase in cash and cash equivalents was RMB 22,376 million, slightly up from RMB 21,664 million in the same period last year[149]. Assets and Liabilities - Total assets as of June 30, 2023, were RMB 2,026,902 million, reflecting a 3.9% increase from RMB 1,951,121 million at the end of 2022[6]. - Total liabilities stood at RMB 1,078.31 billion, rising by RMB 66.73 billion, with non-current liabilities increasing by RMB 65.55 billion[61]. - Current assets reached RMB 573.99 billion, up RMB 50.85 billion, primarily due to increased inventory and accounts receivable[61]. - Non-current assets were RMB 1,452.91 billion, an increase of RMB 24.93 billion, driven by investments in refining and chemical materials[61]. - The asset-liability ratio increased to 53.16% from 51.80%, attributed to an increase in borrowings[140]. Revenue Breakdown - The company's main business revenue was RMB 156.15 billion, down 1.3% year-on-year, primarily due to declining prices of crude oil, refined oil, and chemical products[32]. - The revenue from the sale of refined oil products (mainly gasoline, diesel, and kerosene) was RMB 926.1 billion, an increase of 6.9% year-on-year, accounting for 58.1% of total revenue[35]. - The revenue from chemical products sales was RMB 196.8 billion, accounting for 12.3% of total revenue, a decrease of 16.0% year-on-year[35]. - The operating revenue for the Exploration and Development segment in the first half of 2023 was RMB 144.863 billion, a decrease of 8.4% compared to RMB 158.168 billion in the same period of 2022[46]. - The operating revenue for the Refining segment in the first half of 2023 was RMB 729.557 billion, down 5.9% from RMB 775.636 billion year-on-year, primarily due to a significant decline in international crude oil prices[47]. Production and Sales - The company's oil and gas equivalent production reached 250 million barrels in the first half of 2023, a year-on-year increase of 3.3%[16]. - Natural gas production was 6,609 billion cubic feet, reflecting a year-on-year growth of 7.6%[17]. - The company processed 12,654 million tons of crude oil, an increase of 4.8% compared to the same period in 2022[18]. - Total refined oil sales volume was 11,660 million tons, up 18.5% year-on-year, with domestic sales reaching 9,247 million tons, a 17.9% increase[20]. - The company produced 6,875 thousand tons of ethylene, a slight increase of 0.4% year-on-year[24]. Capital Expenditures and Investments - Capital expenditures for the first half of 2023 totaled RMB 74.67 billion, with RMB 33.42 billion allocated to exploration and development, RMB 7.06 billion to refining, RMB 3.32 billion to marketing and distribution, and RMB 30.04 billion to the chemical sector[26]. - For the second half of 2023, the company plans capital expenditures of RMB 104 billion, with RMB 41 billion for exploration and development and RMB 15.6 billion for refining[28]. - The company plans to produce 141 million barrels of crude oil and 6,309 billion cubic feet of natural gas in the second half of 2023[27]. Environmental and Social Responsibility - The company achieved a 13% year-on-year reduction in COD emissions and a 2% decrease in sulfur dioxide emissions, with a 100% proper disposal rate for hazardous waste[91]. - The company reduced carbon emissions by 2.26 million tons of CO2 equivalent and recycled 843,000 tons of CO2 during the reporting period[91]. - The company has increased the number of supported schools from 37 to 59 as part of its rural revitalization efforts, completing consumption assistance of RMB 400 million[102]. Governance and Compliance - The company has adhered to all provisions of the Corporate Governance Code as per the Hong Kong Listing Rules during the reporting period[89]. - Sinopec's governance policies include regulations for the management of shares held by directors and senior management, ensuring compliance with the standards set by the Hong Kong Listing Rules[81]. - The company has not implemented any equity incentive plans during the reporting period[89]. Risks and Challenges - The company is exposed to macroeconomic risks, including uncertainties in global economic growth and potential impacts from carbon tariffs and trade protectionism[125]. - Sinopec's operations are sensitive to industry cycles, with a significant portion of revenue derived from the sale of refined oil and petrochemical products[127]. - The company faces risks related to oil price volatility, geopolitical factors, and natural disasters, which could adversely affect financial performance[128]. - The company has implemented measures to mitigate various operational risks but acknowledges that complete risk elimination is not feasible[125].