HONG KONG, CHINA / ACCESSWIRE / August 23, 2021 / SINOPEC Engineering (Group) Co., Ltd. ("SEG" or the "Company", together with its subsidiaries collectively known as the "Group") (stock code: 2386) today announces its interim results for the six months ended 30 June 2021 (the "Reporting Period").
On the first half of 2021, directly facing the challenges, the Company fully grasped the development opportunity of the industrial pattern of Sinopec of "focus on building energy resources as the foundation, clean energy and synthetic materials as the two wings, and new energy, new economy and new fields as important growth points", fully promoted the upgrading and transformation of the refining and chemical industry, consolidated the revenue base, and made efforts to achieve innovation and breakthrough in fields such as hydrogen energy industry chain, new material, new energy and digital engineering; explored the advantage of collectivization to improve the efficiency of integration, did a good job in market development, project execution, safe production and epidemic prevention and control. During the Reporting Period, the Company recognized the total revenue of RMB26.851 billion, an increase of 12.8% compared with the same period of last year period-on-period, and the net profit was RMB1.347 billion, with a period-on-period increase of 6.9%. The value of new contracts entered into by the Group was RMB36.663 billion, which remained stable period-on-period. After due consideration of the Group's earnings, return to the Shareholders and the needs for future sustainable development, the Board recommended 2021 interim dividend of RMB0.091 per Share.
QHSE management system efficiency is consistently improved. The Group always adhered to the core value of QHSE as People-oriented and Quality First, constantly improved QHSE management system and effectively implemented corporate responsibility, realized double-victory of epidemic prevention and control as well as safe production, was free from safety accidents, quality accidents and environmental protection accidents, and free from death which is not related to production and public safety incidents. The Group has been maintaining a "zero infection" record in the territory of China, and has kept the overall risk of public safety and epidemic for overseas projects under control. As at the end of the Reporting Period, a total of 141 million hours of safe work have been realized accumulatively; the staff vaccination rate is 88.2%, overfulfilling the vaccination rate target.
Steady construction development of major projects. In the first half of 2021, the Group has strengthened overall planning of resources, efficiently promoted the construction of largescale refining and chemical integration and crude oil storage facility project cluster, realized high-quality intermediate handover of Zhenhai Refining and Chemical Ethylene Expansion Project and commercial crude oil storage project of multiple places, nearly completed Fujian Gulei Refining and Chemical Integration Project, and made smooth progress of Ethylene and Oil Refining Reconstruction and Expansion Project of Hainan Refining & Chemical, laying a foundation for the Company to realize good benefits. As at the end of the Reporting Period, the Group's backlog was RMB115.466 billion, representing an increase of 9.3% compared to that as at 31 December 2020, and was 2.2 times of the total revenue of RMB52.353 billion in 2020.
Intensified efforts in technological innovation. In the first half of the year, the Company continued to increase its efforts on technological innovation. Focusing on technological difficulties and forward-looking technologies, the Group has dedicated on the research of oil conversion, oil specialty conversion, high-end materials, hydrogen energy industry chain, energy conservation and environmental protection, and the new energy, new economy and new fields strategic industries. Of which, two sets of high-end carbon plants have produced qualified products, which set good examples for the future transformation and upgrading of coking plants. Maoming POE, Guizhou PGA, high-pressure polyolefin and other projects were progressing effectively. The detailed design of the green manufacturing of high-grade polybutene-1 resin process technology and equipment R&D and integrated application, and third-generation aromatics technology with industrial application have been completed. Other projects are progressing steadily as planned. In terms of "carbon peak and carbon neutrality" research, the Group and Chinese Academy of Sciences and several other units jointly established a carbon neutral and green technology research and development center, and strive to efficiently transform scientific research results into productivity.
Chairwoman of SEG, Ms. Sun Lili said: "This year is the first year of the "14th Five-Year Plan". We analyzed the current situation, planned our strategies, and carefully laying out the development of the "14th Five-Year Plan". We brave ahead to be "the country's craftsmen", established the development vision of "creating the world's leading technology-leading engineering company", and formulated the development strategy of " value-led, innovation-driven, green and clean, talent-based enterprise development, global development, fusion and co-existence". With "engineering innovation and value creation" as drivers, we are advancing towards the goal of high-quality development. In the first half of this year, amid the complex and ever-changing external environment, we tackled challenges, strengthened overall planning, continued innovation, and deepened reforms, and achieved positive results on major areas. The achievement is the result of the joint efforts of the board of directors, management and all employees, and it is also inseparable from the strong support of shareholders and the society. This year is the 9th anniversary of the company's listing in Hong Kong. Thanks to everyone for the trust and support to the company. I hope that our supporters can continue to follow closely on the Company's development and grow with the company. I believe with the joint efforts of the board of directors, management and all employees, with the strong support of shareholders and the society, SEG will be able to write a new chapter of high-quality development and create greater value for shareholders and the society."
Business Review and Highlights
Forge ahead in market development
During the Reporting Period, the Group continued the intensive work in the domestic market. The Group entered into new contracts for a number of large projects, include 1 million t/a ethylene and oil refining reconstruction and expansion project of Hainan Refining & Chemical with a total contract value of approximately RMB9.506 billion, the EPC contract of Wenzhou LNG receiving station project with a total contract value of approximately RMB3.364 billion, engineering design contract of refined chemical project of North Huajin with a total contract value of approximately RMB626 million, construction contract of Ningbo PTA project of Formosa Chemicals Industries with a total contract value of approximately RMB778 million.
During the Reporting Period, the Group has made a major breakthrough in the Russian market. The Group entered into new contracts for ethylene plant construction project of Amurskaya Oblast AGCC project of Russia with a total contract value of approximately USD942 million; the Group won the bid for the MTO plant process package design contract for natural gas chemical complex of Uzbekistan, so that SMTO technology of SINOPEC went abroad for the first time; and signed melamine PDP - FEED design contract of Malaysia, and will strive to sign EPC contract in the next step.
Quick and steady implementation of major projects
- Committed to becoming the world's top five refining and chemical production base: by strengthening overall planning, coordination and resource investment, the Group has promoted the construction of Zhenhai Refining and Chemical Ethylene Expansion Project in a high quality and efficient manner and that the project has achieved high-standard intermediate handover ahead of schedule.
- The largest petrochemical industry corporation project cross - Strait:Fujian Gulei Refining and Petrochemical Integration Project has entered the final sprint stage of construction, and has realized the intermediate handover of some devices such as ethylene.
- Key projects of the national petrochemical industry plan: the Group has strengthened services to ensure that Hainan Refining & Chemical Integration Project enters a rapid construction phase, with an overall progress of about 30%.
- Sinopec - Saudi Basic Industry Corporation Strategic Cooperation Project: detailed design of SINOPEC SABIC Polycarbonate Project is in the final stage of construction, and close to intermediate handover standard. The Group will ensure the smooth startup of operation of the project by the end of the year by providing better and better service.
- Zhoushan green petrochemical base: Zhejiang Petrochemical Zhoushan Refining and Chemical Integration Project (Phase II) is in the final stage of construction, with an overall progress exceeding 90%.
- Belt and Road strategic project: Amurskaya Oblast AGCC Polyolefin project of Russia is in the stage of design and procurement, with an overall progress of about 40%.
Strong support for engineering service
During the Reporting Period, the Group overcame the impact of the epidemic, actively carried out the normal action to "tackle key problems and enhanced efficiency", strengthen the overall planning of project resources and ensure the smooth operation of the projects; strengthened the coordination of key projects construction, ensured the continuous advancement of all work by relying on the remote collaborative work system; focusing on profitability and progress, the Group implemented the "triple warning" for progress deviation, revenue deviation and budget deviation, rectified the deviation in a timely manner, and strengthened closed-loop management; through optimising the design workflow and professional division interface, the Group strengthened standardization, integration, modular design and modular construction to improve the efficiency of design and construction.
During the Reporting Period, the Group continued to strengthen the construction of subcontracting management system, and dynamically evaluated the operational effectiveness of the QHSE (Quality, Health, Safety and Environment) system of strategic subcontractors; continued to strengthen the cultivation of strategic subcontractors, optimized the allocation of subcontracting resources, and ensured the quality, safety, progress and cost control of project construction; improved the subcontracting resources and information sharing platform, realized the integrated management of subcontractor resource pool and subcontractor evaluation, and optimized the subcontracting management cost. While ensuring the supply of materials for various construction projects, the Group has actively explored ways and means to improve procurement management, procurement efficiency, cost reduction and efficiency promotion, improved management regulations, continued to promote the practice of framework agreement procurement and centralized procurement, and strengthened procurement management for overseas projects, areas of which witnessed remarkable progress.
Hydrogen energy low-carbon and energy-saving environmental protection business has continued to expand
During the Reporting Period, making active response to the "carbon peak" and "carbon neutrality" objectives, the Group has made active arrangement and efforts to cultivate hydrogen energy, low carbon and environmental protection businesses. Firstly, undertake the compilation work of 2 national standards and 1 Sinopec standard related to hydrogen-filling stations, and undertake the construction of the first batch of hydrogen-filling stations of Sinopec; secondly, promote the construction of photovoltaic-to-hydrogen projects in Kuqa of Xinjiang and Erdos, the two projects will become the world's largest green hydrogen production projects after completion of construction; thirdly, in collaboration with Sinopec Dalian Research Institute and Sinopec Gaoqiao Petrochemical, complete a demonstration device for high-purity hydrogen production, so as to refine by-product hydrogen to 99.999%; fourthly, sign a number of contracts for energy management projects, actively promote carbon footprint evaluation service, and undertake research work for a number of energy-saving subjects; fifthly, in the field of soil restoration, closely follow up pollution site restoration projects of multiple regions of China, and strive to expand new business areas; sixthly, in fields such as VOC prevention and control, CO2 collection and wastewater treatment, improve technical reserves to provide high quality solutions for owners; and seventhly, in collaboration with Institute of Process Engineering of Chinese Academy of Sciences and Yanshan Petrochemical, establish Carbon Neutrality Green Technology Joint Research and Development Center, so as to sufficiently utilize experience and advantages to promote the transformation of related scientific and technological achievements.
New breakthroughs have been made in digital engineering construction
During the Reporting Period, centering on establishment of digital engineering system, the Group makes overall plan for top-level design and action plan of digital transformation, continuously improves Detailed Rules for the Implementation on Digital Delivery of Petrochemical Project and data library and data structure, optimizes and enhances the integration platform of project digital delivery and acceptance, and deepens the optimization, fusion and application of project digital twins and intelligent factory operation, maintenance and production, so as to build digital factory construction benchmark demonstration of key projects such as China-Kuwait Refining and Chemical Integration Project and Gulei Refining and Chemical Integration Project from the design source.
In terms of digital engineering platform construction, integrate and enhance integrated-design seed files, promote the engineering main data project application such as the unified engineering documents library, legend library, template files and others, sort and optimize project management program documents such as integrated design operation instruction manual, workflow and others, vigorously promote the development of three-dimensional collaborative design platform and intelligent design tools of all disciplines, refine and solidify integrated design typical project scenario navigation, and comprehensively improve design efficiency and factory design quality.
In terms of industrial digital intelligent application, focus research and development on tackling key problems for key technologies for desktop hydrogen-filling device process model of refining and chemical factory, take the lead in implementation of projects such as "Chinese Central State-owned Enterprises Industrial Internet Platform Collaborative Promotion Mechanism Pilot Project of State-owned Assets Supervision and Administration Commission", "Design Simulation Industrial Software Adaptation Verification Center of Ministry of Industry and Information Technology" and "Equipment Domain Integration Application Construction of Sinopec", explore the establishment of a collaborative consortium featuring data flow fusion throughout all procedures of full life cycle of project, jointly build a new industrial mode of cooperation in which the service needs of the entire industry chain are coupled with the interests of relevant parties, and promote customer digital enabling, intelligent operation and integrated mode reproduction.
Strategically guide and strengthen sustainable development
The Group has fully analyzed the development environment, opportunity and challenge of the company, planned the work ideas and strategic priorities during the "14th five-year plan" period, organized and formulated the development plan during the "14th five-year plan" period, defined the development vision of "building the world's leading technology-oriented engineering company", taking "becoming an integrated service provider with whole industry chain and whole life cycle in energy and chemical industry" as its development orientation, "engineering innovation and value creation" as its development priority, and "value-led, innovation-driven, green and clean, talent-based enterprise development, global development, fusion and co-existence" as development strategy. At present, the Group is profoundly promoting corporate reform and improve management effectiveness, coordinate the development of all business segments, form the advantages of collectivization scale, exert the integration synergy effect, improve and extend the business chain on the basis of consolidating the traditional and core business areas, and make the high-end business bigger and stronger.
Business Prospects
Looking forward to the second half of 2021, although China has been subjected to the huge impact of the COVID-19 epidemic and the influence of severe and complex international situations, China's economy has remained stable recovery, new kinetic energy has grown rapidly, and economic development has shown a steady reinforcement and steady development trend; at the same time, aiming for the target of "carbon peak" and "carbon neutrality", the domestic refining and chemical industry gradually develop towards high-end, intensive and differentiation trend, and promote the extension of the industry toward the high end of value chain.
In respect of the market development, in the second half of 2021, the Group will continue to promote the overall development of key markets, In the advantageous fields such as refining and petrochemical integration, comprehensive utilization of light hydrocarbons, chemical new materials and natural gas utilization, exert the advantages of "large-forces combat", and consolidate and enhance market share; accelerate the promotion of the fields such as new energy, new materials, energy saving and environmental protection, seize the market opportunities of renewable energy, carbon resources and hydrogen resources, promote the building of demonstration devices; extend the service chain in the fields of digital delivery, modular design and construction, high-end manufacturing, and new inspection and maintenance services, etc. In terms of overseas market development, although the Group made a major breakthrough in the Russian market in the first half of this year, signing a construction project contract of USD940 million, but due to the continuing influence of the epidemic, most of bidding projects in the Middle East market have been postponed, and generally speaking, the competition of bidding projects has become more intense, bringing greater uncertainty to the completion of overseas market development targets of this year. Overseas, the Group will work hardly in traditional markets and steadily explore new markets under the precondition of assurance of efficiency as well as prevention and control of risks, and strive to realize steady recovery and development of overseas business after the epidemic.
In respect of project management, in the second half of 2021, domestic epidemic prevention and control will become a new normal, the risk of overseas epidemic spread is still huge, uncertainty of overseas production and business activities will rise. The Group will focus on both epidemic prevention and control as well as production and business operation, carry out normal action to "tackle key problems and enhance efficiency", ensure to steadily propel key projects as planned, and take strong measures to explore the potential of efficiency; strengthen the overall coordination and key monitoring of major domestic projects to prevent a rebound of the epidemic, and stress the early planning and assurance of implementation process of key projects; strengthen project process control, solve problems existing in the project implementation process in time, reduce project management risks, and ensure the smooth implementation of key projects; coordinate and optimize the resource allocation of the project under the conditions of ensuring safety, quality and controllable schedule, and taking the maximization of the company's benefits as the guideline. The Group will continue to do a good job in epidemic prevention and control based on the concept of "life first" and an attitude of being highly responsible towards all employees, and at the same time, strengthen humanistic care to ensure the life safety and mental health of employees.
In respect of technology research and development, in the second half of 2021, while strengthening and optimizing traditional refining and chemical businesses, the Group will closely center on the development vision of "creating a world-leading technology-oriented engineering company", focus on promotion of scientific research and development in engineering and technical fields such as key core technologies and key core equipment, further strengthen technology source-seeking and cooperation, and actively expand the engineering development of energy saving technology, carbon capture technology and CO2-to-olefin technology related to "carbon peak" and "carbon emission reduction", while strengthening the technological innovation capabilities in the field of clean energy and new materials, give full play to the integration advantages of the Group in technology, improve the quality of engineering services through technological innovation, building a technical brand reputation with high quality service, exerting the excellent genes of technology-based enterprise and innovation for development, and enhancing the new momentum for innovation and development of the Group.
Summary of Financial Data and Indicators Prepared in Accordance with International Financial Reporting Standards ("IFRS")
Items | As at 30 June 2021 | As at 31 December 2020 | Changes from the end of 2019 (%) | |||||||||
Total assets | 72,210,511 | 71,465,327 | 1.0 | |||||||||
Total equity attributable to equity holders of the Company | 28,770,273 | 28,251,172 | 1.8 | |||||||||
Net assets per share attributable to equity holders of the Company (RMB) | 6.22 | 6.38 | 1.8 | |||||||||
| For the six months ended 30 June | ||||||||||||
Items | 2021 | 2020 | Changes over the same period of 2020 (%) | |||||||||
Revenue | 26,851,392 | 23,797,156 | 12.8 | |||||||||
Gross profit | 2,524,351 | 2,191,775 | 15.2 | |||||||||
Operating profit | 1,161,083 | 1,150,453 | 0.9 | |||||||||
Profit before taxation | 1,611,209 | 1,562,823 | 3.1 | |||||||||
Net profit attributable to equity holders of the Company | 1,347,127 | 1,260,191 | 6.9 | |||||||||
Basic earnings per share (RMB) | 0.30 | 0.28 | 6.9 | |||||||||
Net cash flow generated from operating activities | (1,978,359 | ) | (1,962,757 | ) | 0.8 | |||||||
Net cash flow generated from operating activities per share (RMB) | (0.45 | ) | (0.44 | ) | 0.8 | |||||||
| For the six months ended 30 June | ||||||||
Items | 2021 | 2020 | ||||||
Gross profit margin (%) | 9.4 | 9.2 | ||||||
Net profit margin (%) | 5.0 | 5.3 | ||||||
Return on assets (%) | 1.9 | 1.9 | ||||||
Return on equity (%) | 4.7 | 4.6 | ||||||
Return on invested capital (%) | 4.8 | 4.7 | ||||||
Items | As at 30 June 2021 | As at 31 December 2020 | ||||||
Asset-liability ratio (%) | 60.2 | 60.5 | ||||||
~ End ~
This press release is issued by PRChina Limited on behalf of SINOPEC Engineering (Group) Co., Ltd.
About SINOPEC Engineering (Group) Co., Ltd.
The Group is a leading energy and chemical engineering company in the PRC with strong international competitiveness and can provide domestic and overseas clients with overall solutions for petrol refining, petrochemicals, aromatics, coal chemicals, inorganic chemicals, pharmaceutical chemicals, clean energy, storage and transportation facilities, environmental protection and energy saving, among other industry sectors. The Group is an integrated service provider for the whole industry chain and the whole life cycle in energy and chemical industry and can provide overall industry chain services including engineering consulting, technology licensing, project management contracting, financing assistance, EPC (engineering, procurement and construction) contracting, as well as design, procurement, construction and installation, lifting and transportation of large equipment, precommissioning and start-up.
After nearly 70 years of continuous development, the Group currently has an academician of the Chinese Academy of Sciences, three academicians of the Chinese Academy of Engineering and more than10,000 professionals. The Group has rich project management and implementation experience, and owns and cooperatively owns patents and know-how in core business areas. The Group has delivered on schedule hundreds of modern factories with enormous investment, complicated process, advanced technology and high quality to clients in more than 20 countries and regions around the world, established long-term and steady cooperative relationships with large energy and chemical enterprises at home and abroad, maintained an extensive and stable client base, and enjoys remarkable industrial influence and social reputation.
In the future, adhering to the development orientation of "Integrated Service Provider with Whole Industry Chain and Whole Life Cycle in Energy and Chemical Industry", the Group will base itself on the energy and chemical engineering construction industry, continuously broaden its business scope and extend its value chain, comprehensively improve the level of safe, efficient, green and lowcarbon service in the business chain, and create a new momentum in achieving the corporate vision of "building the world's leading technology-oriented engineering company".
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:
PRChina Limited
Joanne Liu / Rachel Xia / Jack Liu
Tel: (852) 2522 1838 / (852) 2522 1368
Fax: (852) 2521 9955
Email: seg@prchina.com.hk
SOURCE: China Petroleum and Chemical Corporation
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