Star Metro - Sinopec FY2024 Annual Results

BEIJING, CN / ACCESS Newswire / March 23, 2025 / China Petroleum & Chemical Corporation ("Sinopec Corp." or the "Company") (HKEX: 386; SSE: 600028) today announced its annual results for the twelve months ended 31 December 2024.

Financial Highlights

• The Board considered and approved the Company's market value management policy, and the proposal to grant to a mandate for new round of share repurchase.

Business Highlights

In 2024, China's economy maintained stability, registering a GDP growth of 5.0% year-on-year. International crude oil prices fluctuated in a wide range. The domestic demand for natural gas grew rapidly, while that for refined oil products domestically declined slightly, and domestic demand for chemical products continued to increase. The Company made every effort to expand the market and sales, intensified the optimisation of the integration of production and operation, continued to strengthen cost and expense control, and took multiple measures to cope with the impact of market changes.

• Chemicals: The Company closely followed the market demand, vigorously implemented operations optimization and costs reduction and steadily increased the proportion of high value-added products in synthetic resin, synthetic fibre, synthetic rubber and fine chemicals. Yearly ethylene production was 13.47 million tonnes. By strengthening strategic client cooperation and providing tailor-made product services, as well as actively exploring domestic and global market, total chemical sales volume reached 83.45 million tonnes, up by 0.5%, with export volume up by 13.1%.

Mr. Ma Yongsheng, Chairman of Sinopec Corp. said, "Over the past year, the Company's high-quality development momentum became more forceful. Adhering to the innovation as a driving force, we made outstanding progress in core technologies in exploration and development of new type oil and gas, refining specialties, and new chemical materials. With digital and intelligent technology empowering industrial development, intelligent operation center 2.0 was put into operation, and an intelligent ethylene factory based on digital twins was built. In addition, taking transition and upgrading as a driving force, we made steady progress in a number of refining and chemical upgrading and facilities revamping projects, such as Zhenhai Refining and Chemical Phase II capacity expansion project and the high-end new materials project. We continued to develop us into a comprehensive energy service provider of 'petrol, gas, hydrogen, power and service'. Our domestic market share of automotive LNG business stayed ahead with a total of more than 10,000 EV charging and battery swapping stations and 142 hydrogen refueling stations, and Easy Joy's service scope was further enriched. The Company's corporate governance became more effective. The Board implemented 'Corporate Value and Return Enhancement Action Plan' and the Dividend Distribution and Return Plan for Shareholders for the Next Three Years, formulated the Company's first market value management policy, and continued the domestic and overseas share repurchase to improve asset quality, operational efficiency, and enterprise value. We strengthened ESG governance and disclosure, and achieved good results. Actively responding to global climate change, we steadily advanced the 'Eight actions for Carbon Peaking' and energy efficiency benchmarking and upgrading, mapped out detailed medium and long-term carbon emission reduction targets, launched the second phase of the Green Enterprise Action plan, and vigorously promoted pollution prevention and control. Our comprehensive energy consumption per RMB10,000 of production output and emissions of major pollutants continued to decline. 2025 is the final year of the '14th Five-Year Plan' and the 25th anniversary of the Company's listing. Adhering to the complete, accurate and comprehensive implementation of the new development philosophy, Sinopec Corp. will focus on scientific and technological innovation, industrial transition, reform and management, difficulty overcoming and profit improving, risk prevention and other key areas, strive to improve our operation quality and increase business scale reasonably, spare no efforts to protect enterprise value of the Company, promote high-quality development in an all-round way, and lay a solid foundation for a good start of the '15th Five-Year Plan'."

Business Review

Exploration and Production Segment

In 2024, the Company strengthened high-quality exploration and profitable development and further improved profitability. The Company made progress in increasing oil and gas reserve and gas output, stabilizing oil production as well as cutting cost. In terms of exploration, we spared no effort to expand exploration & development licenses and increase reserves. Significant breakthroughs were made in the exploration of ultra-deep shale gas in the Sichuan Basin, risk exploration in the Songliao Basin, and shale oil in the Bohai Bay Basin. The construction of the Shengli Jiyang Shale Oil National Demonstration Zone was efficiently promoted. In terms of oil development, we accelerated the construction of key oil production capacities such as Tahe, West Jungar, and Shengli Offshore, and reinforced the fine-tuned development of mature oil fields. In natural gas development, we actively pushed ahead the building of key natural gas production capacities such as Shunbei Area Ⅱ and marine facies gas in West Sichuan. At the same time, we further optimised the synergy of integrated gas business system covering production, supply, storage and sales, with the profit for the whole gas business chain hitting a historical high. The Company's production of oil and gas in 2024 was 515.35 million barrels of oil equivalent, up by 2.2% year-on-year, among which domestic crude oil production totaled 254.00 million barrels, up by 0.9% year-on-year, and natural gas production reached 1,400.4 billion cubic feet, up by 4.7% year-on-year.

In 2024, the operating revenue of this segment was RMB297.2 billion, representing a decrease of 0.9% over 2023. This was mainly attributable to the decrease in crude oil prices. In 2024, the oil and gas lifting cost was RMB745.40 per tonne, representing a decrease of 1.3% year-on-year. In 2024, this segment seized the opportunity of relative high crude oil prices, intensified high-quality exploration, strengthened the integration of the whole natural gas industry chain, and spared no efforts to increase reserves, boost production, cut cost, and improve profit, achieving operating profit of RMB56.4 billion, with an increase of RMB11.4 billion and 25.4% over 2023.

Summary of Operations for the Exploration and Production Segment

Refining Segment

In 2024, the Company actively addressed the challenges brought by weak demand and the narrowing margins of certain refining products, and optimised integrated production and marketing. We enhanced regional coordination, went all out for profitable processing volume and maintained a relatively high utilisation rate. We closely aligned with the demand of the entire business value chain to coordinate crude oil resources and reduce procurement costs. We followed market demand and flexibly adjusted product mix and export scheduling by producing more jet fuel and continuously reducing the diesel-to-gasoline ratio. Effort was made to carry forward the transition of low-cost "refined oil products to chemical feedstocks" and high-value "refined oil products to refining specialties" strategy, and to increase production of market-favored products such as high-end carbon materials and refining specialties. We sped up the building of refining clusters and proceeded with refining structural adjustment projects in an orderly manner. In 2024, the Company processed 252 million tonnes of crude oil and produced 153 million tonnes of refined oil products, with gasoline and kerosene output up by 2.6% and 8.6% respectively year-on-year.

In 2024, the operating revenue of this segment was RMB1,481.5 billion, representing a decrease of 3.2% over 2023. This was mainly due to the decreased prices of refined oil products year-on-year resulting from decreased price of international crude oil, and decreased sales volume of diesel year-on-year. In 2024, the refining unit cash operating cost (defined as operating expenses less the processing cost of crude oil and refining feedstock, depreciation and amortisation, taxes other than income tax and other operating expenses, then divided by the throughput of crude oil and refining feedstock) was RMB209 per tonne, representing a decrease of 1.6% over 2023, which was mainly attributable to the year-on-year decrease in costs of power and maintenance. In 2024, the segment continued to intensify efforts in optimization of the industrial chain and regional integration, coordinated cost-effective crude oil procurement based on the demand of industrial chain, dynamically adjusted utilisation rate and product slate, strengthened cost and expense control. Impacted by factors including the decrease in crack spread of jet fuel, and increase in procurement of imported crude oil due to difference of the foreign exchange rate, the segment realised an operating profit of RMB6.7 billion, decreased by RMB13.9 billion or 67.4% year-on-year.

Summary of Operations for the Refining Segment

Note: Includes 100% of the production of domestic joint ventures.

Marketing and Distribution Segment

In 2024, by adapting to market changes, the Company fully leveraged its integration and network advantages, and continued to build an integrated energy service provider of petrol, gas, hydrogen, power and service. We carried forward targeted marketing tactics, expanded strategic clients base and boosted the sales volume of high-grade gasoline. We stepped up effort in gas refueling and EV battery charging and swapping businesses. Over one thousand gas-refueling stations and more than 10 thousand battery charging and swapping stations were built. Hydrogen-based traffic was promoted steadily. Meanwhile, we vigorously expanded our global presence, explored the low-sulfur bunker fuel market both at home and abroad and the total operating volume of our bunker fuel business ranked second in the world. We continued to enrich the Easy Joy service ecosystem and upgraded non-fuel business operational quality. Total sales volume of refined oil products for the year was 239 million tonnes.

In 2024, the operating revenues of this segment were RMB1,714.4 billion, down by 5.7% year-on-year. This was mainly attributable to weak demand for refined oil products, the decrease in the Company's sales volume of refined oil products and the decreased prices of refined oil products resulting from decreased price of crude oil. In 2024, the gross profit of non-fuel business of this segment was RMB11.5 billion, representing an increase of RMB0.9 billion year-on-year, among which, gross profit of selling convenience store products and providing related services was RMB11.1 billion, up by RMB0.52 billion year-on-year, mainly due to the Company actively responded to market changes, and enriched Easy Joy's service scope. Gross profit of EV charging business was RMB0.43 billion, up by 20 times year-on-year, mainly attributed to the growth of business scale. The charging volume reached 1.8 billion kilowatt-hours, increasing by 21 times year-on-year. The profit of non-fuel business of this segment was RMB4.7 billion, representing an increase of RMB0.1 billion year-on-year. In 2024, facing complex market environment, the segment strived to maintain the market share of refined oil products, actively explored new business models including EV charging, battery swapping and non-fuel business, and promoted transition and development on all fronts to offset the impact of factors including new energy and vehicle LNG substitution. The segment realised an operating profit of RMB18.6 billion, representing a decrease of RMB7.3 billion year-on-year, down by 28.1% year-on-year.

Summary of Operations for the Marketing and Distribution Segment

Note: The total sales volume of refined oil products includes the amount of refined oil marketing and trading sales volume.

Chemicals Segment

In 2024, in the face of the tough external environment of the newly added domestic chemicals supply and narrowed chemical margin, the Company closely followed market demand, further optimised operation and slashed costs and expenses. The Company optimised the structure of feedstock, facilities and products, and maintained high utilisation rate in profitable facilities such as aromatics, with a focus on efficiency, thus achieving a new historical high in PX production. We continued to diversify feedstock to bring down costs and raise the ratio of high-value-added products steadily. Yearly ethylene production was 13.47 million tonnes. By strengthening strategic client cooperation and providing tailor-made product services, as well as actively exploring domestic and global market, total chemical sales volume reached 83.45 million tonnes, up by 0.5%, with export volume up by 13.1%.

In 2024, the operating revenue of this segment was RMB523.9 billion, up by 1.7% year-on-year. This was mainly due to the increase in sales volume and prices of chemical products year-on-year. In 2024, the segment closely followed the market trend, deepened integration of production, marketing and research, optimised the structure of feedstock, facilities and products, improved resource allocation efficiency and proportion of high value-added products, and enhanced cost control including feedstock, fuel, and power. Impacted by newly added domestic chemicals capacity and significant narrowed chemical product margin, the operating loss of the segment was RMB10.0 billion, down by RMB4.0 billion year-on-year.

Summary of Operations for the Chemicals Segment

Note: Includes 100% of the production of domestic joint ventures.

Science and Technology Innovation

In 2024, the Company pushed forward the integrated innovation of science and technology together with the industry, deepened the reform of the science and technology system and mechanism, strived to build national-level research institutes in the energy sector, and achieved new results in science and technology innovation. In upstream, breakthroughs were made in the exploration theories and technologies for deep and ultra-deep shale gas. Profitable production were obtained by applying shale oil development technologies in Jiyang and North Jiangsu basins. In refining, we successfully applied the catalyst and technology for producing BTX products through LCO hydrocracking aromatic extraction and batch production and application for refining specialties including animal vaccine white oil and ultra-high voltage transformer oil was realized. In chemicals, we put into operation the world's first cyclohexene esterification and hydrogenation unit for producing cyclohexanone, and carried forward ultra-high molecular weight polyethylene, linear alpha-olefin (LAO) and other key technologies into industrial application. In addition, intelligent ethylene plant based on digital twins became operational and China's first factory-scale seawater to hydrogen production demonstration project was completed. In 2024, the Company filed 9,666 patent applications at home and abroad with 5,550 of them granted.

HSE

In 2024, the Company continued to improve the HSE management system with professional management further strengthened. We further implemented the all-staff work safety responsibility mechanism, carried forward the scheme of the Safety Management Enhancement Year, and made every effort to promote major risk control and incident prevention, thus maintaining overall stability in production safety. We continuously enhanced health management, improved working conditions and strengthened prevention and control of occupational diseases at the source. Effort was also made to promote the development of the health-consciousness of the Company and safeguard the occupational, physical, and mental health for employees both at home and abroad.

Capital Expenditures

In 2024, the Company continued to optimise the management of projects, with a capital expenditure of RMB175.0 billion for the whole year. The capital expenditure of the E&P segment was RMB82.3 billion, mainly for the crude oil production capacity building in Jiyang and Tahe, natural gas production capacity building in West Sichuan as well as the oil and gas storage and transportation facilities. The capital expenditure of the refining segment was RMB29.3 billion, mainly for ZRCC Expansion and Guangzhou Petrochemical technological upgrading projects etc. The capital expenditure of the marketing and distribution segment was RMB14.1 billion, mainly for the development of the petrol, gas, hydrogen, power and service integrated energy network, the renovation of the existing marketing network, non-fuel business and other projects. The capital expenditure of the chemical segment was RMB44.7 billion, mainly for the ethylene units in Zhenhai and Maoming and aromatics unit in Jiujiang etc. The capital expenditure of corporate and others was RMB4.6 billion, mainly for R&D and digitalization projects, etc.

Business Outlook

Looking forward to 2025, as China's economy continues to recover and improve, domestic demand for natural gas and chemical products is expected to maintain growth, and that for refined oil products will remain influenced by alternative energy. Taking into account the impact of changes in global supply and demand, geopolitics and inventory levels, international crude oil prices are expected to fluctuate within a wide range.

In 2025, the Company will focus on value creation, industrial transition, scientific and technological innovation, reform and management, risk prevention and control to promote high-quality development on all fronts, and will make great efforts in the following areas:

E&P: The Company will strengthen the linkage between exploration & development licenses and reserves, endeavour to acquire high-quality and large-scale exploration and development licenses, increase risk exploration and trap pre-exploration, strengthen exploration in the fields of marine facies carbonate rocks, shale oil and gas and tight oil and gas, and increase high-quality and scaled reserves; strengthen profitable development, and take multiple measures to reduce the break-even point. In terms of crude oil development, we will accelerate the construction of production capacity in Shengli Offshore, Jungar west and Tahe, build a high-quality national demonstration area for Shengli Jiyang shale oil, and strengthen the fine development of mature areas. In terms of natural gas business, we will accelerate the construction of production capacity in Sichuan Xujiahe reservoir, Shunbei Area Ⅱ and Sichuan West Marine Phase, focus on operation optimisation and market development, and enhance the profitability of natural gas business. For the year, we plan to produce 280.15 million barrels of crude oil, of which 25.26 million barrels will be from abroad, and 1,450.3 billion cubic feet of natural gas.

Refining: The Company will focus on improving quality and profitability, adhere to the synergy between production and sales, and ensure the efficient operation of the industrial chain and the efficient utilisation of advantageous production capacity. We will give full play to the advantages of global of resources allocation, increase the differentiated procurement of crude oil and reduce the procurement cost; enhance the degree of crude oil processing intensification and promote the optimisation of regional resources; continue to optimise the crude throughput, utilization rate and product slate, and make every effort to increase the production of jet fuel; continue with the transition of low-cost "refined oil products to chemical feedstocks" and high-value "refined oil products to refining specialties" strategy, and promote the development of products such as lubricating grease, special wax and sustainable fuel, and build up an industry chain for high-end carbon material. The annual plan is to process 255 million tonnes of crude oil and produce 155 million tonnes of refined oil products.

Marketing and Distribution: The Company will give full play to its advantages in integrated business, strengthen digital intelligence empowerment and enhance its comprehensive competitiveness. We will continue to coordinate procurement and sales, as well as volume and price to stabilise the scale of retail business; continue to optimise the network layout and build the prime brand of LNG refuelling business; consolidate and enhance the advantages of low-sulphur bunker fuel production and sales, and actively expand the scale of business at home and abroad; deepen the application of big data analysis, and explore the value of data assets; expand hydrogen application scenarios, demonstrate and drive the utilisation of hydrogen, promote the development of the electricity business, and expand and extend the value chain of the electricity business; strengthen the building of our own brand, accelerate the expansion of the comprehensive service scenarios of EasyJoy, and accelerate the transition to an "petrol, gas, hydrogen, power and service" comprehensive energy service provider. For the full year, the Company"s domestic marketing sales volume plan is 178 million tonnes.

Chemicals: The Company will closely track changes in the chemical market, adhere to the "basic + high-end" strategy, make every effort to reduce costs, expand the market, and tap potential for improving profitability. We will continue to promote the diversification of feedstocks and take various measures to reduce the feedstock cost; dynamically optimise the utilization rate, reduce the frequency of changing products in certain unit, and improve the gross margin of products; and intensify the development of new products and high value-added products, so as to expand the potential for profit creation. At the same time, we will meet the differentiated and tailor-made needs of our customers, increase the proportion of sales to strategic customers, increase the export of profitable products, and enhance the level of international operations. For the full year, we plan to produce 15.59 million tonnes of ethylene.

Science and Technology Innovation: The Company will firmly implement the innovation-driven strategy, promote the deep integration of the innovation, industry, capital and talent, focus on key areas and make every effort to develop core technologies, and give full play to the supporting and leading role of scientific and technological innovation. We will intensify our research efforts in new fields such as shale oil and gas, deep coalbed methane, and offshore technologies, and promote the increase of oil and gas reserves and production. We will increase technological innovation in catalytic cracking, catalytic reforming, hydrogenation and other technologies to support low-cost "refined oil products to chemical feedstocks" and high-value "refined oil products to refining specialties" strategy. We will continue to enhance the technological ad-vancement of basic organic feedstocks and synthetic materials, and accelerate the technological breakthrough of high-end materials. We will promote technological research in new fields such as deep geothermal energy, hydrogen energy and circular economy. We will carry out the 'AI+' action and promote the deep integration of artificial intelligence with the whole industrial chain.

Capital Expenditure: In 2025, the Company's capital expenditures is RMB164.3 billion. The capital expenditure in the E&P segment is RMB76.7 billion, which will be mainly used for the construction of crude oil production capacity in areas such as Jiyang and Tahe, the construction of natural gas production capacity in areas such as Dingshan-Dongxi and Western Sichuan, as well as oil and gas storage and transportation facilities. The capital expenditure in the refining segment is RMB22.3 billion, mainly for the projects such as the Guangzhou Petrochemical revamping and Maoming Refining upgrading projects. The capital expenditure in the marketing and distribution segment is RMB14.5 billion, mainly for the development of the comprehensive energy network, the renovation of the existing sales network, and projects related to non-fuel business. The capital expenditure in the chemical segment is RMB44.9 billion, mainly for ethylene projects in Maoming, Zhenhai and Qilu, and the aromatics project in Jiujiang. The capital expenditure for the corporate and others is RMB5.9 billion, mainly for R&D and digitalization projects, etc.

Appendix: Key financial data and indicators

FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH CASS

Principal accounting data

Principal financial indicators

FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH IFRS

Principal accounting data

Principal financial indicators

The following table sets forth the operating revenues, operating expenses and operating profit by each segment before elimination of the inter-segment transactions for the periods indicated, and the percentage changes between 2024 and 2023.

About Sinopec Corp.

Sinopec Corp. is one of the largest integrated energy and chemical companies in China. Its principal operations include the exploration and production, pipeline transportation and sale of petroleum and natural gas; the production, sale, storage and transportation of refinery products, petrochemical products, coal chemical products, synthetic fibre, and other chemical products; the import and export, including an import and export agency business, of petroleum, natural gas, petroleum products, petrochemical and chemical products, and other commodities and technologies; and research, development and application of technologies and information; hydrogen energy business and related services such as hydrogen production, storage, transportation and sales; battery charging and swapping, solar energy, wind energy and other new energy business and related services。

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：(86 10) 5996 0028
Fax：(86 10) 5996 0386
Email：[email protected]

Hong Kong
Tel：(852) 2522 1838
Fax：(852) 2521 9955
Email [email protected]

File: Sinopec FY2024 Annual Results

SOURCE: China Petroleum & Chemical Corporation

View the original press release on ACCESS Newswire

O.Lessard--SMC