Sinopec: gradually emerging from the most difficult period

Sinopec: gradually emerging from the most difficult period

The current diesel sales have recovered to the same period last year, gasoline sales have rebounded to 90% of the same period last year, and chemical product sales have rebounded to 86% of the same period last year

On April 29, according to the Sinopec Information Office, due to the dual impact of the COVID-19 and the sharp drop in international oil prices, Sinopec suffered a periodic loss in its performance in the first quarter. However, at present, Sinopec's diesel sales have recovered to the level of the same period last year, gasoline sales have rebounded to 90% of the level of the same period last year, and chemical product sales have recovered to 86% of the same period last year. The production and operation situation has gradually improved.

Since the beginning of this year, Sinopec has increased efforts to promote epidemic prevention and control and resumption of work and production, minimizing the impact of the epidemic and the sharp drop in oil prices, and maintaining safe and stable production operations. In particular, in the process of fighting against the COVID-19, the company actively fulfilled its social responsibility, ensured the stable supply of oil and gas, increased the supply of medical and health raw materials, and fulfilled the solemn commitment of "continuous supply of oil products, no price rise of goods, and no closing of services"; Innovate business models, facilitate people's lives, and drive the resumption of work and production in the industrial chain; Expanding the employment of college graduates and assisting migrant workers in returning to work have contributed positively to epidemic prevention and control as well as economic and social development.

The first quarter performance report of Sinopec shows that in the first quarter of 2020, the COVID-19 spread around the world, the downside risk of the world economy increased, and various uncertainties and uncertainties increased significantly. China's gross domestic product (GDP) decreased by 6.8% year-on-year, and the demand for petroleum and petrochemical products in the market has significantly decreased. Coupled with the impact of the sharp drop in international oil prices, the petroleum and petrochemical industry has been greatly impacted. According to the Chinese Enterprise Accounting Standards, Sinopec's net profit attributable to its parent company shareholders in the first quarter was RMB 197.82 billion. According to International Financial Reporting Standards, the net profit attributable to the company's shareholders in the first quarter was RMB -191.45 billion.

The main reason affecting the first quarter performance is the loss of high priced crude oil inventory due to the sharp drop in oil prices. Sinopec is a continuous production enterprise with the world's largest refining and processing capacity, processing 249 million tons of crude oil in 2019. In order to ensure safe and stable production, it is necessary to maintain a certain amount of crude oil inventory for a certain period of time in advance. The cycle from crude oil procurement to processing into product sales is approximately 2-3 months. The price of finished oil sold in the first quarter is determined based on the current crude oil price, while the cost reflects the high priced crude oil purchased at the end of last year and the beginning of this year.