HONG KONG, March 19, 2018 /PRNewswire/ -- SINOPEC Engineering (Group) Co., Ltd. ("SEG" or the "Company", together with its subsidiaries collectively known as the "Group") (stock code: 2386) today announces its annual results for the twelve months period ended 31 December 2017 (the "Reporting Period").
Results Highlights
In 2017, facing the new normal economic development, the new cycle of international oil prices, the new market competition, the Group faced difficulties and challenges, made efforts and achieved hard-won production and operation performance. For the year 2017, the Company's revenue was RMB36.209 billion and net profit was RMB1.130 billion. Asset-liability ratios maintained at low level and cash flow performance remained strong. The Board recommended a final dividend of RMB0.144 per Share for the year 2017. After taking into account the interim dividend of RMB0.056 per Share, total dividend for the year will be RMB0.200 per Share, annual payout ratio reaching 79%.
New contracts recorded significant growth amid improving market environment: Taking the partial commencement of certain projects of the "seven major national petrochemical industry bases" and Sinopec Group's mission to build four "world-class refining bases" as opportunities, the Company stepped up its market development efforts, and strived to seize good opportunities in the domestic market.
Projects were carried out smoothly with strengthened process management: During the Reporting Period, to ensure a more efficient, orderly and safe implementation of projects, the Company largely promoted resource integration and strengthened design, subcontracting and settlement management so as to ensure projects in the PRC as well as overseas could be implemented successfully. Safety, quality, progress and so on were fully under controlled. As at the end of 2017, the Group's backlog was RMB91.028 billion, representing an increase of 3.2% year-on-year and equivalent to 2.5 times of the total revenue realized in 2017.
Continuous promotion of scientific and technological innovation and technology advancement resulted in numerous fruitful achievements in technology innovation: During the Reporting Period, the Group was awarded with 95 items (times) of various prizes for scientific and technological advancement above provincial/ministerial levels, including two projects of "coal-based oil/olefin large-scale modern coal chemical industry complete technology development and application" and "high efficiency methanol to olefins whole process technology" were awarded the first prize of national science and technology progress in 2017; "deep delayed coking technology to improve the yield of light oil" won second prize.
The initial grant of the H Shares Appreciation Rights Scheme marked steady progression of reform: During the Reporting Period, the Company's H Share Appreciation Rights Scheme was approved by the SASAC and by the shareholders at the general meeting. 13.143 million H share appreciation rights were awarded to 89 members including the Company's directors, senior management members and core technical personnel, management and high-skilled personnel at an exercise price of HK$6.35 per share. The implementation of the Company H Share Appreciation Rights Scheme will have a positive impact on the Company's level of governance, promotion of reform and development and promotion of business performance.
Chairman of SEG, Mr. LING Yiqun said, "In 2017, the Company continued to guide its development and innovation along with the four strategies of "energy and petrochemical-oriented, innovation-driven, globalization-targeted and value-focused", and actively explore domestic and foreign markets, and constantly strengthen engineering support capacity, optimize business structure and internal resources, and achieve stability in the development trend. In the 2017 ENR rankings, the Company was ranked 53rd in the "Top 250 International Engineering Contractors", up 22 places over the previous year. The Company was also ranked 53rd in the "Global Top 250 Engineering Contractors", indicating that the Company's overall strength and international competitiveness were constantly enhancing. Looking ahead into 2018, the Company will adhere to reform and innovation, focus on breaking the institutional mechanisms restricting the development of enterprises, adhere to the transformation of development, and while improving the quality and efficiency of traditional business, cultivate and develop new business, adhere to the development of talent support, and strive to build talent advantage. The Company will go all out to ensure growth, control risk, bring benefits, push the reform, grasp innovation, promote development, and create new greater value for the country, for shareholders, for the community and for the staff."
Business Review and Highlights
Significant results in market development
During the Reporting Period, the Group exploited its overall advantages in its industry, business and technical chains, under the circumstance where domestic market environment was improved, increased home market development efforts; seized the "Belt and Road" opportunities, strengthen financing project cultivation, and make progress in "Belt and Road" countries and regions. During the Reporting Period, the value of new contracts entered into by the Group was RMB39.063 billion, representing an increase of 41.7% on a year-on-year basis. Among which, the value of newly signed domestic contracts amounted to RMB29.070 billion, representing an increase of 69.1% on a year-on-year basis, and the value of newly signed overseas contracts amounted to approximately RMB9.993 billion, representing a decrease of 3.6% on a year-on-year basis.
In the PRC, during the Reporting Period, the Group entered into new contracts for a number of large projects, such as Sinochem Quanzhou Ethylene Project with a contract value of approximately RMB4.259 billion; Zhejiang Petrochemical and Refining-chemical Integration Project with a contract value of approximately RMB3.713 billion, Dalian Hengli Refining-chemical Integration Project with a contract value of approximately RMB2.201 billion; Zhenhai Bubbling Bed Residuum Hydrotreating Project with a contract value of approximately RMB1.376 billion; Yangzi Petrochemical 100,000 tpa EVA Unit Project with a contract value of approximately RMB996 million; Jinan Catalytic Cracking Project with a contract value of approximately RMB680 million; Great Wall Energy and Chemical Ningxia Syngas Debottleneck Project with a contract value of approximately RMB358 million.
Overseas, during the Reporting Period, the Group signed new contracts for a number of large projects, such as Iranian Abadan Refinery Upgrading Project Project Phase II EPC Contracting Project with a contract value of approximately RMB6.858 billion; Russia AGPP-P3 Project, under which the Group has formed a consortium with Maire Tecnimont SpA (an Italian company) and has an equity interest of approximately 119 million euros in the contract; the 3rd Saudi Kayan Spare Desalted Water Station System Project with a total contract value of approximately USD 12.8 million, etc.
In addition to the above projects, the Group has also tracked some oil refining, petrochemical engineering, new coal chemicals, environmental protection and energy saving projects, which are expected to be signed in the future.
Successful Implementation of Major Projects
- Eastern China 's largest coal - based methanol to olefins project: In January 2017, the Company received a notice from the owner of the Zhong'An Joint Coalification Complex Project for resumption of work. As at the end of the Reporting Period, the overall progress of the project was over half.
- Large-scale LNG storage and receiving station projects using the Company's patented design and construction technologies: At the end of the Reporting Period, intermediate handover of the Tianjin LNG Project has been implemented and successfully in production, positively easing the tight supply of natural gas in North China.
- Building a world-class portside petrochemical base: The design work of the Sinochem Quanzhou 1 million tons / year ethylene and oil refining expansion project has commenced and relative work was in orderly development.
- Large crude oil commercial reserve base project：About four tenths of the overall construction work of the Dongjiakou crude oil commercial reservation base project was completed and some tanks are being installed.
- World class large refining-chemical integration project: As at the end of the Reporting Period, the oil refining part of the Dalian Hengli Refining-chemical Integration Project was in the overall construction stage of civil engineering, the design is finishing; the ethylene part of the project was in process design.
- World class large refining-chemical integration project: As at the end of the Reporting Period, more than half of the detailed design of the Zhejiang Petrochemical and Refining-chemical Integration Project has been completed and was in the early stage of civil construction.
- The Company's largest project by contract value in the Gulf region: As at the end of the Reporting Period, the overall progress of the Kuwait Oil Refining Project was about 50%, of which: detailed design work was basically completed.
- The Company's largest project in the Southeast Asian region: As at the end of the Reporting Period, about nine tenths of the overall progress of the Malaysia RAPID Oil Refining Project was completed, in which, design, procurement work has been completed, construction and installation was near the end and the commissioning work has started at the site.
- The Company's large-scale oil refining projects in Central Asia: The overall progress of the FCC Project of Kazakhstan Atyrau Refinery was nearing completed and the final commissioning was underway.
- The Company's largest project by contract value in the Middle East: As at the end of the Reporting Period, the first phase of the Iranian Abadan Refinery Product Upgrading Project was about three tenths and the field work has been started.
Engineering support capability being strengthened continuously
In order to strengthen the design management and establish the knowledge sharing mechanism, the Group summarizes the experiences and lessons of the large-scale construction projects in recent years, compiles and publishes the Design FAQ Manual with engineering examples, and organizes the design staff to exchange learning and further improve the design level of the Company.
In order to enhance the Company's project management level, adhering to the first-class standard the Group adopts the international general Engineering, Procurement, Construction & Commissioning (EPCC) Project organization and role design, has a comprehensive coverage of EPCC business content, and write international project management guide.
In order to improve subcontracting management capacity, reduce costs and ensure revenue recognition of the project, the Group has established and promulgated a unified construction subcontracting management system and management standards, implemented integrated management mode of subcontracting management, and further ensure the quality and safety of subcontracting works under control.
Continuously strengthen risk control, improve the Group's project settlement and inventory management work mechanism, set up a complete project inventory management data system, exert the Group's joint efforts, and strengthen the project implementation process to confirm the timeliness of progress, standardize the project settlement, and improve project effectiveness.
Continuous promotion of technological innovation and technology advancement
Continues expansion of engineering and technological research
Scientific and technological research has achieved significant results: comprehensive completion of 6 tasks namely Hubei chemical fertilizer coal to ethylene glycol, Jinling boiling bed residue hydrogenation, high-voltage xlpe insulating materials, lco production of high octane gasoline, RS-2200 low-cost China V Diesel Fuel, Shanghai petrochemical PAN-carbon fiber, and achieved industrial production smoothly.
Successful start-up or intermediate handover of 5 sets of equipment of Maoming ethylene oxide plant, Tianjin LNG, Shijiazhuang alkylation device with smooth operation of these research projects. The projects of Zhenhai coal water slurry gasification and second generation aromatic hydrocarbon energy efficiency promotion in Hainan have completed the stage goal.
Multi-level new topics technology has great prospects: 200,000 tpa solid acid alkylation complete sets of technology, heavy raw materials to increase production of low-carbon olefins and BTX key technology, 2,000 tons of clean and efficient SE pulverized coal gasification technology industry demonstration, gas phase polypropylene products VOC removal process complete technology, Datong Plasma Treatment VOCs complete sets of technology and demonstration 5 projects finalists focus on tackling. Methane oxidation coupling to ethylene, alkylation of waste acid to sulfuric acid, sludge integrated treatment technology, large storage tanks outside the floating roof construction tooling, construction visualization of the project and other aspects of technical improvement and innovation achieve the stage results.
Good momentum persisted in patent applications. During the Reporting Period, the Group completed 466 new patent applications (including 224 invention patents) and licensing of 312 patents (including 134 invention patents). Highlight the focus, and continuously strengthen the field of new technology and the protection of core technical achievements and continue to improve the quality of patents.
Continuously achieving numerous fruitful results in technology innovation. During the Reporting Period, the Group was awarded with 95 items (times) of various prizes for scientific and technological advancement above provincial/ministerial levels, including two projects of "coal-based oil/olefin large-scale modern coal chemical industry complete technology development and application" and "high efficiency methanol to olefins whole process technology" were awarded the first prize of national science and technology progress in 2017; "deep delayed coking technology to improve the yield of light oil" won second prize.
Continuous expansion of the energy saving and environmental protection business
Attaching great importance to the exploration of the energy saving and environmental protection market, the Group has integrated its own technological advantages and cooperated with well-known domestic and international technology patent licensors. The scope of the Group's business now covers multiple fields such as flue gas desulfurisation and denitration, VOCs control, sewage treatment, slurry reduction and drying, soil remediation, CO2 recovery, equipment process flow and heat exchange network optimization, device-to-device system thermal integration optimization, and key energy dissipation equipment advanced technology optimization, low temperature utilization, etc. The Group was actively involved in Sinopec's "Clear Water & Blue Sky Plan" and "Energy Efficiency Doubling Plan", and actively explored to implement new business models for contractual energy management and contractual environmental protection management, providing energy saving diagnosis and optimisation services for enterprises, which further develop the Group's environmental protection and energy saving business. During the Reporting Period, the Group entered new environmental protection business contracts valued at RMB1.234 billion, which was mainly from flue gas desulfurisation and denitrification projects, and new energy saving business contracts valued at approximately RMB36.74 million, which was mainly from energy saving reform projects.
In terms of energy saving business development, the Group focused on energy and chemical Industry contract energy management, energy saving engineering services, energy saving technical advice and services, energy saving investment, energy saving policy-related topics such as research, provide customers with one-stop, overall energy saving technology services. The Group actively promoted the contract energy management business, successfully implemented a number of contract energy management projects, had access to a number of financial incentives and greater tax relief, is promoting dozens of contracts for energy management, and some projects have been engaged in contract negotiations. The Group is actively engaged in energy saving technology exchanges and cooperation, and further enhance the overall advantages in the field of energy saving services, making efforts to green low-carbon, energy saving emission reduction embodied in the design of digital and intelligent factory, promote the deep integration of energy and modern information technology, and promote the change of energy production management and consumption patterns.
In terms of environmental protection business development, the Group continues to promote the development of soil management business, and is developing a number of soil management projects, some have completed the pilot. Communicate with the United States, Germany, Czech and other countries, continue to improve soil management technology reserves; actively explore new energy market, carry out the construction of the industrial demonstration project for ten thousand tons of biomass gasoline and carry out the exchange and cooperation of bio-ethanol projects; carry out million-ton CO2 capture and utilization cooperation, conduct research of the plan of CO2 electrochemical conversion and utilization of industrialization, lay the foundation for entering the market for carbon emission reduction and carbon trading.
Market Outlook and Business Prospects
Looking ahead to 2018, the world economy is expected to continue to grow, and China's economy will continue to develop steadily in a high degree of integration with the world economy. The international oil market is accelerating rebalancing in 2018, and the extension of the reduction agreement has injected more confidence into the recovery and rebalancing of the oil market, but oil demand and non-OPEC supply uncertainties have increased and international oil prices have remained volatile. In 2018, the global industry investment is expected to be difficult to achieve significant growth, some projects in the national seven petrochemical industry base and Sinopec Group's four world-class refining bases will have substantial progress, production and management situation in the domestic refining, chemical engineering industry will be significantly improved. As long as the Group seizes the opportunity to overcome the challenges, better and faster development can be achieved in the new phase.
In 2018, the Group will actively seize the improvement of the domestic market situation, make full use of its advantages such as collectivisation, integration and economies of scale, continuously enhance its core competition edge, propel its sustainable and healthy development and make efforts to become a "national business card" of the Chinese oil refinery and chemical engineering industry. In 2018, the target domestic new contract value of the Group is RMB38 billion, and the target overseas new contract value is USD1.5 billion.
Summary of Financial Data and Indicators Prepared in Accordance with International Financial Reporting Standards ("IFRS")
Unit: RMB '000
|
Items
|
As at 31 December 2017
|
As at 31 December 2016
(restated)
|
As at 31 December 2015
(restated)
|
As at 31 December 2014
|
As at 31 December 2013
|
Changes from the end of 2016 (%)
|
|
Non-current assets
|
7,540,799
|
7,871,988
|
7,977,456
|
8,052,331
|
8,166,479
|
(4.2)
|
|
Current assets
|
51,864,822
|
51,016,799
|
50,490,979
|
44,032,264
|
39,198,790
|
1.7
|
|
Current liabilities
|
31,015,076
|
30,724,440
|
30,802,686
|
26,347,950
|
23,620,920
|
0.9
|
|
Non-current liabilities
|
2,799,540
|
2,899,238
|
2,972,052
|
2,864,071
|
2,764,008
|
(3.4)
|
|
Consolidated equity attributable to equity holders of the Group
|
25,586,839
|
25,261,201
|
24,689,960
|
22,869,116
|
20,976,714
|
1.3
|
|
Net assets per share of equity holders of the Group (RMB)
|
5.78
|
5.70
|
5.56
|
5.16
|
4.74
|
1.3
|
|
Note: "Restated" - the Group acquires Sinopec Energy Saving Technology Service Co., Ltd. in August 2017 and merges business with it under the same control.
|
Unit: RMB '000
|
Year ended 31 December
|
Changes over the same period of 2016 (%)
|
|
Items
|
2017
|
2016
(restated)
|
2015
|
2014
|
2013
|
|
Revenue
|
36,208,723
|
39,402,331
|
45,498,354
|
49,345,959
|
43,571,851
|
(8.1)
|
|
Gross profit
|
4,026,172
|
4,295,415
|
6,157,034
|
6,290,612
|
6,406,191
|
(6.3)
|
|
Operating profit
|
1,112,267
|
1,942,256
|
3,845,193
|
4,039,003
|
4,413,485
|
(42.7)
|
|
Profit before taxation
|
1,635,101
|
2,376,776
|
4,240,047
|
4,550,695
|
4,751,041
|
(31.2)
|
|
Profit attributable to equity holders of the Group
|
1,129,974
|
1,670,888
|
3,317,704
|
3,489,799
|
3,656,802
|
(32.4)
|
|
Basic earnings per share (RMB)
|
0.26
|
0.38
|
0.75
|
0.79
|
0.93
|
(32.4)
|
|
Net cash flow generated from/(used in) operating activities
|
4,565,508
|
4,670,772
|
5,793,143
|
333,312
|
(85,995)
|
(9.2)
|
|
Net cash flow generated from/(used in) operating activities per share (RMB)
|
0.96
|
1.05
|
1.31
|
0.08
|
(0.02)
|
(9.2)
|
|
Year ended 31 December
|
|
Items
|
2017
|
2016
(restated)
|
2015
|
2014
|
2013
|
|
Gross profit margin (%)
|
11.1
|
10.9
|
13.5
|
12.7
|
14.7
|
|
Net profit margin (%)
|
3.1
|
4.2
|
7.3
|
7.1
|
8.4
|
|
Return on assets (%)
|
1.9
|
2.8
|
6.0
|
7.0
|
8.7
|
|
Items
|
As at 31 December 2017
|
As at 31 December 2016
(restated)
|
As at 31 December 2015
(restated)
|
As at 31 December 2014
|
As at 31 December 2013
|
|
Asset-liability ratio (%)
|
56.9
|
57.1
|
57.8
|
56.1
|
55.7
|
This press release is issued by PRChina Limited on behalf of SINOPEC Engineering (Group) Co., Ltd.
About SINOPEC Engineering (Group) Co., Ltd.
SINOPEC Engineering (Group) Co., Ltd. is an international engineering corporation, with the leading edge in the PRC. The Group provides engineering services for a broad range of industries including oil refining, petrochemicals, new coal chemicals, inorganic chemicals, pharmaceutical chemicals, clean energy, storage and transportation engineering, environmental protection and energy saving engineering, with a complete service chain involving research, development and licensing, preliminary consultation, financing assistance, design, procurement, construction, large equipment lifting and transportation, and pre-commissioning/start-up services. With its industry experience of more than 60 years and continual innovation in technical expertise, the Group has achieved great success in the design and construction of large-scale and complex oil refining, petrochemical, new coal chemical, natural gas processing and storage and transportation engineering projects, and possesses strong competitiveness.
Disclaimer
This press release includes "forward-looking statements". All statements, other than statements of historical facts that address activities, events or developments that the Group expects or anticipates will or may occur in the future (including but not limited to projections, targets, other estimates and business plans) are forward-looking statements. The Group'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, 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 the Group's control. In addition, the Group makes the forward-looking statements referred to herein as of today and undertakes no obligation to update these statements.
Investor and Media Enquiries:
SINOPEC Engineering (Group) Co., Ltd. - Office of the Board
Shan Kai / Liu Jingjing / Yang Yue
Tel: (86) 10 6499 8019 / (86) 10 6499 8020 / (86) 10 6499 8017
Fax: (86) 10 6499 8193
Email: seg.ir@sinopec.com
PRChina Limited
David Shiu / Charles Chan / Terence Ng
Tel: (852) 2522 1838 / (852) 2522 1368
Fax: (852) 2521 9955
Email: dshiu@prchina.com.hk / ckchan@prchina.com.hk / tng@prchina.com.hk
SOURCE China Petroleum & Chemical Corporation
