Sinopec's Dividend Payout Ratio for 2017 Reaches 118%, Net Profit is RMB 51.2 Billion

BEIJING, March 25, 2018

Financial Highlights

• In accordance with IFRS, the Company's turnover and other operating revenues reached RMB 2.36 trillion in 2017, up 22.2% from the previous year. Profit attributable to equity shareholders of the Company was RMB 51.24 billion, up 9.8% year-on-year. Basic earnings per share were RMB 0.423.
• In accordance with ASBE, the Company's operating profit was RMB 87.0 billion, representing a 12.4% increase as compared with 2016. Profit attributable to shareholders of the Company was RMB 51.1 billion, up 10.1% year-on-year. Basic earnings per share were RMB 0.422.
• In accordance with IFRS, the Company's liability-to-asset ratio as at the end of 2017 was 46.54%, which represented an increase of 2.01 percentage points compared with the end of the previous year. Meanwhile, the Company maintained a sound financial position. Cash and cash equivalents amounted to RMB113.2 billion as at 31 December 2017, maintaining at a healthy level.
• The Company focused on quality and efficiency of its development, optimised product and feedstock mix, increased high-value-added products production based on the customer demand. Refining and chemicals segments results both achieved record high. Operating profit of the refining segment totaled RMB 65.0 billion, an increase of 15.5% year-on-year. Operating profit of the chemicals segment was RMB 27.0 billion, up 30.8% year-on-year.
• Taking into account the Company's profitability, cash position, shareholder return and future business development, the Board proposed a final dividend of RMB 0.40 per share, which combined with the interim dividend of RMB 0.10 per share, brought the full-year dividend to RMB 0.50 per share, up 100.8% from the previous year. Dividend payout ratio reached 118%. Total cash dividend to be paid for the full year was RMB 60.5 billion, highest since its listing.
• In accordance with IFRS, the Company's total assets increased by 9.9% and shareholders' equity increased by 22.4% compared with the levels in 2014. During the three years of the sixth session of the Board, the Company's turnover and total assets have grown steadily. The Company's businesses have expanded rapidly, and overall performance has continued to improve. In addition, the Company delivered good returns to shareholders, with total dividends declared for the three-year period amounting to RMB 108.8 billion.

Business Highlights

In 2017, global economy recovered gradually, while China maintained stable and favourable economic growth with gross domestic product (GDP) up by 6.9%. As the Company made major decisions, the Board of Directors focused on steady and firm improvement, continued to focus on supply-side structural reform and stepped up efforts to enhance the Company's efficiency, profitability and corporate governance with an emphasis on delivering returns to shareholders.

• Exploration and Production segment: implemented a low-cost strategy to address the challenge of low oil prices, focused on high-efficiency exploration and development, and enlarged proved reserves to lay a stronger foundation for sustainable development. The Company also developed its natural gas business as a new driver for profit growth. The Company built up the production capacity of the Fuling shale gas field to 10 billion cubic meters per year.
• Refining segment: optimised product mix and the production volume of high-value-added products have been further improved. The Company actively promoted refined oil products quality upgrading and optimised its production plans along with market changes. The advantages of centralised marketing took full play and the Company developed this business into its profit growth drivers
• Marketing and Distribution segment: innovated operational models, optimized layout of service stations and brought he Company's advantages in integrated business and distribution network into full play, achieving sustained growth in both total sales volume and retail scale. In addition, the Company proactively promoted and cultivated vehicle natural gas business. Non-fuel business maintained its rapid growth.
• Chemicals segment: adopted a customer-focused approach and enhanced the adjustments in our product and feedstock mix. The Company intensified its efforts to enhance research and development, production, marketing and sales of new high-value-added products and implemented precision marketing. Both the sales volume and profitability of the chemicals segment reached record highs.

Mr. Dai Houliang, Vice Chairman & President of Sinopec Corp. said, "In 2017, The Company actively addressed market changes through a focus on the improvement of assets quality and profitability, as well as operation upgrades. We pressed ahead with measures for specialised business development, market-oriented operation and overall coordination. With a focused supply-side structural reform, we coordinated all aspects of our work and delivered solid operating results. In 2018, the global economy will continue to recover. While China's economic development model will shift from high-speed growth to high- quality development, domestic demand for oil and chemical products will remain robust. In view of the new requirements in the new era, the Company will adhere to an underlying principle of progressing at a steady pace and under a new development model that makes quality and efficiency our top priorities. We will continue to implement our set strategies and enhance our corporate governance with China's characteristics. We will also strive diligently to improve our production and operational standards, reinforce our reform, innovation and management to enable sustainable development."

Business Review

Exploration and Production