Sinopec Corp. Announces 1Q2005 Results; Profit Attributable to Shareho

    Business Editors

    BEIJING--(BUSINESS WIRE)--April 28, 2005--China Petroleum & Chemical Corporation ("Sinopec Corp." or "the Company") (HKEX: 386; NYSE: SNP; LSE: SNP; CH: 600028) today announced its financial results for the first quarter ended 31 March 2005.
    In the first quarter of 2005, the Chinese economy continued to grow and domestic demand for refined oil products and petrochemical products remained strong. International prices of crude oil fluctuated at a fairly high level. Through the adoption of various measures to increase production volume and optimise operations in response to the changing market, the Company obtained reasonably good operating results in various areas, including oil and gas production, processing volume of crude oil, sales volume of refined oil products and ethylene production.
    Based on the PRC Accounting Rules and Regulations, income from principal operations of the Company for the first quarter of 2005 amounted to RMB 169.040 billion, representing an increase of 36.89% over the same period last year, and the net profit amounted to RMB 9.004 billion, representing an increase of 21.18% over the same period last year. Based on IFRS, the turnover and other operating revenues of the Company for the first quarter of 2005 amounted to RMB 174.127 billion, representing an increase of 34.35% over the same period last year. Profit attributable to shareholders of the parent amounted to RMB 9.637 billion, representing an increase of 16.02% over the same period last year.

Operating Highlights --------------------

Financial Highlights in accordance with the PRC Accounting Rules and Regulations ---------------------------------------------------------------------- Changes at the end of this reporting period compared with data at the end of the At 31 March At 31 December preceding year end 2005 2004 (%) ---------------------------------------------------------------------- Total assets (RMB millions) 481,785 460,081 4.72 ---------------------------------------------------------------------- Shareholders' funds (excluding minority interests) (RMB millions) 195,417 186,350 4.87 ---------------------------------------------------------------------- Net assets per share (RMB) 2.254 2.149 4.87 ---------------------------------------------------------------------- Adjusted net assets per share (RMB) 2.206 2.102 4.95 ---------------------------------------------------------------------- Changes in this reporting period compared to the same Three-month Three-month period of the period ended period ended preceding year 31 March 2005 31 March 2004 (%) ---------------------------------------------------------------------- Net cash flow from operating activities (RMB millions) 14,854 11,208 32.53 ---------------------------------------------------------------------- Earnings per share (RMB) 0.104 0.086 20.93 ---------------------------------------------------------------------- Return on net assets 0.25 percentage (%) 4.608 4.363 points ---------------------------------------------------------------------- Return (adjusted for non-operating profits/losses) on net (0.17) percentage assets (%) 4.681 4.852 points ----------------------------------------------------------------------

Financial Highlights (IFRS) ---------------------------------------------------------------------- Changes at the end of this reporting period compared with data at the end of the preceding At 31 March At 31 December year end 2005 2004 (%) ---------------------------------------------------------------------- Total assets (RMB millions) 497,046 474,594 4.73 ---------------------------------------------------------------------- Shareholders' funds attributable to shareholders of the parent (excluding minority interests) (RMB millions) 202,677 193,040 4.99 ---------------------------------------------------------------------- Net assets per share (RMB) 2.338 2.226 4.99 ---------------------------------------------------------------------- Adjusted net assets per share (RMB) 2.294 2.187 4.89 ---------------------------------------------------------------------- Changes in this reporting period compared to the same Three-month Three-month period of the period ended period ended preceding year 31 March 2005 31 March 2004 (%) ---------------------------------------------------------------------- Net cash flow from operating activities (RMB millions) 12,793 9,874 29.56 ---------------------------------------------------------------------- Earnings per share (RMB) 0.111 0.096 15.63 ---------------------------------------------------------------------- Return on net assets 0.14 percentage (%) 4.755 4.612 points ----------------------------------------------------------------------

    Business Review

    In the first quarter of 2005, through the adoption of various measures to increase production volume and optimise operations in response to the changing market, the Company obtained reasonably good operating results in various areas, including oil and gas production, processing volume of crude oil, sales volume of refined oil products and ethylene production.

    Exploration and Production Segment

    The Company has made further efforts in exploration and development. Significant achievements have been made in exploration of concealed oil and gas reserves in the mature oil fields in eastern China. The exploration in the Tahe oilfield in western China has yielded positive discoveries. During the period, the Company accelerated the pace of construction in order to increase production capacity in major areas. Oil production was stable and gas production increased over the same period last year.

    Refining Segment

    Under the backdrop of pricing control over oil products in the domestic market, the Company optimised the refining process and resource allocation, adjusted the product mix and increased the production of high value-added products. In addition, resources allocation and transportation were optimised and the price difference between sour and sweet crude oil was taken advantage of, the processing volume of sour crude oil was increased and stable operation of the refining facilities which had been operated at a high utilization rate was maintained.

    Marketing and Distribution Segment

    The Company coordinated production and sales closely in an effort to meet the strong demand for oil products in the domestic market, which resulted in a increase in its domestic sales volume of refined oil products. At the same time, the Company took measures to raise its retail and distribution volume, which resulted in a steady increase in the proportion of retail and distribution sales as a percentage of total sales.

    Chemicals Segment

    The Company adhered to the marketing strategy of "focusing on market, full-load production and low inventories". It also adjusted its product mix and optimised its marketing structure. During the period, the production of major chemical products such as synthetic resin, synthetic rubber, monomer and polymers for synthetic fibers has increased significantly. The production volume of high value-added products such as performance compound resins and differential fibers also experienced growth. In the first quarter of 2005, production has been commissioned for the Secco ethylene project.

Summary of Principal Operating Results for the first quarter

Three-month periods Changes ended 31st March compared Operating Data Unit ------------------- with the same period last year 2005 2004 (%) ---------------------------------------------------------------------- Exploration and Production ---------------------------------------------------------------------- Crude oil production thousand tonnes 9,530.5 9,538.3 (0.08) ---------------------------------------------------------------------- Natural gas production million cubic meters 1,469 1,395 5.30 ---------------------------------------------------------------------- Realised crude oil price RMB/tonne 2,127.29 1,678.63 26.73 ---------------------------------------------------------------------- Realised natural gas price RMB/ thousand cubic meters 655.36 606.47 8.06 ---------------------------------------------------------------------- Refining ---------------------------------------------------------------------- Crude processing volume thousand tonnes 34,334.7 32,368.6 6.07 ---------------------------------------------------------------------- Gasoline, diesel and thousand kerosene production tonnes 20,607.2 19,250.9 7.05 ---------------------------------------------------------------------- Of which: Gasoline thousand tonnes 5,816.2 5,730.6 1.49 ---------------------------------------------------------------------- Diesel thousand tonnes 13,112.3 12,043.1 8.88 ---------------------------------------------------------------------- Kerosene incl. thousand jetfuel tonnes 1,678.7 1,477.2 13.64 ---------------------------------------------------------------------- Light chemical feedstock thousand tonnes 4,992.2 4,534.0 10.11 ---------------------------------------------------------------------- Light yield (0.37) percentage % 73.48 73.85 points ---------------------------------------------------------------------- Refining yield (0.19) percentage % 92.63 92.82 points ----------------------------------------------------------------------

Marketing and Distribution ---------------------------------------------------------------------- Total domestic sales of thousand refined oil products tonnes 24,130.5 21,704.5 11.18 ---------------------------------------------------------------------- Of which: Retail thousand tonnes 13,460.0 11,977.2 12.38 ---------------------------------------------------------------------- Distribution thousand tonnes 5,350.6 4,401.4 21.00 ---------------------------------------------------------------------- Wholesale thousand tonnes 5,319.9 5,325.9 (0.11) ---------------------------------------------------------------------- Total number of petrol stations Stations 30,164 30,416 (0.83) ---------------------------------------------------------------------- Of which: Owned and self- operated Stations 26,682 24,680 8.11 ---------------------------------------------------------------------- Franchised Stations 3,482 5,736 (39.30) ---------------------------------------------------------------------- Throughput per petrol Tonne/ station (Note 1) station 2,018 1,757 14.85

Chemicals (Note 2) ---------------------------------------------------------------------- Ethylene thousand tonnes 1,121.8 1,041.5 7.71 ---------------------------------------------------------------------- Synthetic resins thousand tonnes 1,683.1 1,544.9 8.95 ---------------------------------------------------------------------- Of which: performance thousand compound resins tonnes 845.6 725.8 16.51 ---------------------------------------------------------------------- Synthetic rubbers thousand tonnes 158.1 152.1 3.94 ---------------------------------------------------------------------- Monomers and polymers for thousand synthetic fibers tonnes 1,595.6 1,515.2 5.31 ---------------------------------------------------------------------- Synthetic fibers thousand tonnes 400.0 407.1 (1.75) ---------------------------------------------------------------------- Of which: differential thousand fibers tonnes 195.1 133.7 45.92 ---------------------------------------------------------------------- Urea thousand tonnes 388.3 541.5 (28.29) ----------------------------------------------------------------------

Notes 1: Throughput per petrol station is that of annual average; 2: The operating results for the three-month period ended 31 March 2004 are pro-forma data which includes the data of Chemical Assets acquired from China Petrochemical Corporation and its subsidiaries (excluding the Company,) ("Sinopec Group").

    Capital Expenditure

    The capital expenditure of the Company in the first quarter of 2005 was RMB 11.359 billion. The expenditure for the Exploration and Production segment was RMB 4.451 billion. The newly added production capacity of crude oil and natural gas amounted to 0.60 million tonnes/year and 90 million cubic meters/year respectively. The expenditure for the Refining segment was RMB 1.256 billion. The second phase of the Ningbo-Shanghai-Nanjing crude oil pipeline will commence operation in the near future. The revamped refining facilities in Yangzi Petrochemical and Jinling Petrochemical have come on stream. The revamping of refining facilities in Yanshan and Guangzhou and construction of the crude oil pipeline along the Yangzi River are on schedule. The expenditure for the Chemical segment was RMB 0.804 billion. The expansion of ethylene facilities in Sinopec Maoming Chemical and ethylene glycol innovation project in Shanghai Petrochemical, the Yangtze Petrochemical's PTA revamping project, Gaoqiao Petrochemical's ABS facilities and other key technical innovation projects such as chemical fertilizer coal-gasification projects progressed smoothly. The expenditure for the Marketing and Distribution segment was RMB 4.719 billion. The construction of the southwest oil products pipeline, as well as the revamping and acquisition of petrol stations are on schedule. The expenditure for the Company's headquarters, and other expenditures was RMB 0.129 billion. Information projects such as ERP also made smooth progress.
    In addition, the capital expenditure for joint ventures such as Shanghai Secco ethylene project, Yueyang Sinopec-Shell coal gasification project and BASF-YPC was approximately RMB 1.292 billion.

    Notice: Sinopec Corp. will be hosting a teleconference to discuss the Company's 1Q2005 results on Friday, April 29, 2005, at 11:00 a.m. Beijing time (4:00 a.m. London time and 11:00 p.m., April 28, 2005, New York time) at (852) 2258-4102; access code: Sinopec. A 24-hour replay will be available at (852) 2802-5151; access code: 758122. The teleconference will also be archived on www.sinopec.com.

    About Sinopec Corp.

    Sinopec Corp. is the first Chinese company that has been listed in Hong Kong, New York, London and Shanghai. The Company is an integrated energy and chemical company with upstream, midstream and downstream operations. The principal operations of Sinopec Corp. and its subsidiaries include: exploring, developing, producing and trading crude oil and natural gas; processing crude oil into refined oil products; producing, trading, transporting, distributing and marketing refined oil products; and producing and distributing chemical products. Based on 2004 turnover, Sinopec Corp. is the largest listed company in China. The Company is one of the largest crude oil and petrochemical companies in China and Asia. It is also one of the largest gasoline, diesel and jet fuel and other major chemical products producers and distributors in China and Asia.
    For additional information about Sinopec Corp., please visit the Company's website at www.sinopec.com.cn.

--30--ML/ny*

CONTACT: Sinopec Corp. Investor Inquiries: Tel: 8610-6499-0092 Fax: 8610-6499-0489 Email: ir@Sinopec.com.cn or Media Inquiries: Tel: 8610-6499-0060 Fax: 8610-6499-0093 Email: media@Sinopec.com.cn

KEYWORD: CHINA INTERNATIONAL ASIA PACIFIC INDUSTRY KEYWORD: ENERGY CHEMICALS/PLASTICS EARNINGS SOURCE: Sinopec Corp.

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