SEG Announces 2019 Annual Results
HONG KONG, March 23, 2020 /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 ended 31 December 2019 (the "Reporting Period").
In 2019, confronted with heavy tasks and various challenges, the Group has made efforts to fulfill the market development targets, ensure the progress of key projects, tighten cost control and expenses reduction, deepen enterprise reform, and strengthen quality and safety management, and has achieved hard-won business performance. During the Reporting Period, the Group's revenue was RMB52.261 billion, representing an increase of 11.1% on a year-on-year basis; the net profit was RMB2.184 billion, representing an increase of 30.0% on a year-on-year basis; After due consideration of the Group's earnings, return to the Shareholders and the needs for future sustainable development, the Board recommended a final dividend of RMB0.212 per Share for the year 2019. After taking into account the interim dividend of RMB0.108 per Share, the total dividend for the year will be RMB0.320 per Share, representing a substantial increase of 42.9% on a year-on-year basis. Payout ratio reached 65%.
The Group firmly grasped the golden opportunity of domestic refining investment and achieved significant results in market development. SEG focused on the potential projects of "seven major national petrochemical industry bases" and the "world-class refining bases" of Sinopec Group, exerted our competitive advantages to strive to expand our market shares. In 2019, the Group entered into new contracts for a number of large projects in the PRC, such as Fujian Gulei Refining and Petrochemical Integration Project, largest petrochemical industry corporation project cross – Strait, with a total contract value of approximately RMB12.513 billion. The Group has continuously improved its competitiveness, improved the deployment in overseas markets. In 2019, the Group achieved breakthroughs in the Omani and Uzbek markets for the first time. It also signed new contracts of Saudi Aramco Marjan Oil and Gas Increase and Expansion Project, BASF USA Pipeline Prefabrication Project, Kuwait's Al-Zour New Refinery Maintenance Project and Saudi Aramco Overhaul and Renovation Project. During the Reporting Period, the total new contract value was RMB52.319 billion, representing an increase of 2.7% on a year-on-year basis.
Continuous enhancement of project management capability and guarantee successful implementation of the projects. In 2019, Zhongke Refining and Chemical Integration Project achieved a comprehensive high standard of handover while Zhong'An Joint Coalification Integration Project successfully finished start-up. The 4,000-ton crawler crane made its debut in Saudi Arabia, and the down-stream processing project of Kazakhstan won the China Construction Engineering Luban Prize. In respect of more efficient, orderly and safe implementation, the Group fully leveraged its overall advantages by overall planning and optimising resources, worked hard to control the cost of subcontracting and procurement, and the safety, quality, progress and cost of the projects were under fully control. As at 31 December 2019, the Group's backlog was RMB94.994 billion, which was generally in line with that as at 31 December 2018, and 1.8 times of the total revenue of RMB52.261 billion in 2019.
Steady progress in research and development and numerous fruitful results in technological innovation. The Group worked hard to successfully organise the collaboration of major technologies and the implementation of technological innovation projects, made full use of the distinctive advantages of the R&D center in the development of engineering technology and continuously strengthened the collaboration with well-known licensors in the world. "Development and Industrial Application of Second-Generation High Efficiency Environmental-friendly Aromatics Packaged Technology" was successfully commissioned once in September 2019, producing eligible PX products. High Efficiency Catalyst and Complete Set of Technology for Dilute Ethylene Value-added Conversion" received the national scientific and technological advancement award.
Chairman of SEG, Mr. Yu Renming said: "In 2019, the world's political and economic situation was complicated and changeable, the Group has made efforts to fulfill the market development targets, ensure the progress of key projects, tighten cost control and reduce expenses, deepen enterprise reform, and strengthen quality and safety management, and has achieved hard-won business performance. Looking forward to 2020, profound changes are brewing in the energy and chemical industry. The industrial structure, consumption structure and energy structure are constantly adjusted. The Group's operation and development are facing new opportunities and challenges. The Group will earnestly carry out analysis on the circumstances and task, imperturbably face and tackle challenges, and build itself into a 'service provider of the whole life cycle from project planning to project operation', striving to create a new momentum for the reform and development of the SEG, so as to deliver real benefits to to shareholders , society and employees with more excellent performance."
Business Review and Highlights
Significant results in market development
During the Reporting Period, the Group made full use of its overall advantages in its industry, business and technical chains, and expanded its presence in the market in a proactive manner. During the Reporting Period, the value of new contracts entered into by the Group was RMB52.319 billion, among which, the value of newly signed domestic contracts amounted to RMB45.585 billion, which remained broadly the same on a year-on-year basis, and the value of newly signed overseas contracts amounted to approximately RMB6.734 billion, representing an increase of 34.6% on a year-on-year basis.
The Group continued to deepen its traditional markets while striving to open up new regional markets. The Group entered into new contracts for a number of large projects in the PRC, such as Fujian Gulei Refining and Petrochemical Integration Project with a total contract value of approximately RMB12.513 billion, Sinopec Tianjin Oil Product Upgrade Project with a total contract value of approximately RMB2.601 billion, Tianjin Bohai Chemical DMTO Relocation and Transformation Project with a total contract value of approximately RMB2.049 billion, Sinochem Quanzhou Oil Refining Reconstruction and Expansion Project with a total contract value of approximately RMB1.913 billion.
The Group strengthened its cooperation with international engineering companies, continuously improved its competitiveness, improved the deployment in overseas markets, strengthened the building of overseas outlets and expanded its business to new regions and new fields. The Group achieved breakthroughs in the Omani and Uzbek markets for the first time, signing the Oman DUQM Refinery P2 Construction Project with a total contract value of approximately RMB376 million, and the basic design of the new sulfuric acid and phosphate fertilizer project for Uzbekistan with a total contract value of approximately RMB29 million. During the Reporting Period, other major newly signed overseas projects of the Group include Saudi Aramco Marjan Oil and Gas Increase and Expansion Project with a total contract value of approximately RMB1.004 billion; BASF USA Pipeline Prefabrication Project with a total contract value of approximately RMB826 million; Kuwait's Al-Zour New Refinery Maintenance Project with a total contract value of approximately RMB395 million; Saudi Aramco Overhaul and Renovation Project with a total contract value of approximately RMB376 million.
In addition to the above projects, the Group also followed up with several projects in oil refining, petrochemical engineering, new coal chemicals, environmental protection and energy saving fields, and is expected to sign the contracts with the relevant parties regarding such projects in the future.
Successful Implementation of Major Projects
- One of Sinopec Group's "four world-class refining bases": Zhongke Refining and Chemical Integration Project was in the final stage of construction with an overall progress exceeding 90%, and the progress was under control in general.
- The largest petrochemical industry corporation project cross - Strait：Fujian Gulei Refining and Petrochemical Integration Project is in the stage of underground pipeline and civil construction, with an overall progress of about 30%.
- Eastern China 's largest coal-based methanol to olefins project: Zhong'An Joint Coalification Complex Project's main units achieved a comprehensive high standard of handover, and the whole plant successfully commissioned once and produced acceptable products.
- Sinopec - Saudi Basic Industry Corporation Strategic Cooperation Project: detailed design of SINOPEC SABIC Polycarbonate Project was completed, and the field installation started, with an overall progress of about 40%.
- Building a world-class portside petrochemical base: Sinochem Quanzhou Ethylene Project is in the final stage of construction, with an overall progress exceeding 90%.
- The Company's largest project by contract value in the Middle East region: Kuwait Oil Refining Project has been completed and handed over to the owner, which made us the first to complete the contract among the contractors in the project and was highly recognised by the owner.
- The Company's largest project in the Southeast Asian region: the overall progress of the Malaysia RAPID Oil Refining Project has already completed the start-up of the atmospheric unit, and the start-up of other units was in progress as scheduled.
- The Company's boutique project implemented in Saudi: design of Saudi Arabia SABIC GAS Phase-9 Air Separation Project has been largely completed, and the procurement progressed nearly 80%. Currently, the project is under construction with an overall progress exceeding 70%.
Continuous enhancement of project management capability
The Group kept close communications with owners, strengthened the coordination of key projects construction, issued a list of key projects, established a coordination group for key projects, and strengthened organisation and coordination. Focusing on efficiency and progress, the Group implemented the "triple warning" for progress deviation, revenue deviation and budget deviation, rectified the deviation in a timely manner, strengthened closed-loop management, and ensured the smooth implementation of the projects. Through optimising the design work‑flow and professional division interface, the Group strengthened standardisation and modular designs, and improved design efficiency; carried out project management trainings and contract management trainings, creating International Project Management Manual brand trainings and implementing the advanced management concepts and management processes of international projects; strengthened project settlement management, continuously followed up the reduction of project inventory and accounts receivable, and constantly paid attention to the analysis of project basic data and rectification guidance.
The Group further improved the subcontracting management system, strengthened the cultivation of strategic subcontractors, and evaluated the operational effectiveness of the QHSSE system of strategic subcontractors; developed subcontracting resources and information sharing platform, realised integrated management of subcontractor resource pool and subcontractor assessment, with continuous optimisation of allocation in subcontracting resources, which reduced subcontracting management costs. While ensuring the supply of materials for various construction projects, we have actively explored ways and means to improve procurement management, procurement efficiency, cost reduction and efficiency promotion. We improved standard procedures, document templates and management regulations, promoted framework agreement procurement, and strengthened procurement management for overseas projects, areas of which witnessed remarkable progress.
Continuous promotion of innovation and technological advancement
Steady progress in research and development of engineering technologies and major progress in key scientific research projects. The Group has newly set up 190 key scientific research projects. Relevant scientific research projects closely focused on the development trend and demand of engineering market technologies.
Key research and development projects have been steadily moved forward. "Development and Industrial Application of Second-Generation High Efficiency Environmental-friendly Aromatics Packaged Technology" was successfully commissioned once in September 2019. The key research tasks represented by "SE Water Coal (Coke) Slurry Gasification Complete Technology" have achieved the key research objectives at a high standard. Other key research projects, such as "Alkylation of High-grade Polybutene -1 and 200,000 Tons Per Annum ZCA-1 Solid Acid", were all moved forward as scheduled and under overall control.
Increasing number of patent applications and numerous fruitful results in technological innovation. The Group completed 600 new patent applications, among which, 370 or 61.7% applications were invention patents applications. The Group also had 338 newly licensed patents, 138 of which were invention patents.
During the Reporting Period, the Group received a total of 72 scientific advancement awards in scientific innovation and engineering construction fields at the provincial and above level. Among these awards, "High Efficiency Catalyst and Complete Set of Technology for Dilute Ethylene Value-added Conversion" received the national scientific and technological advancement award. Further, there was 1 provincial and ministerial scientific advancement award, 24 provincial and ministerial invention awards, 1 national excellent design award, 10 high quality projects awards, and 27 provincial and ministerial high quality projects awards.
ERP system successfully constructed and implemented
During the Reporting Period, the Group comprehensively promoted the application of integrated design and digital delivery, and established a construction platform for digital factory based on INTERGRAPH/AVEVA production line. The innovation of the Group in engineering design model supported the intelligent factory operation of domestic and foreign owners. The Group strengthened the cross-group control of large-scale engineering software licensing in full scope, full module, full process and full element costs, deepened application of intelligent process design, comprehensively promoted integrated engineering design, improved quality and efficiency of visual three-dimensional design, achieved breakthrough in pilot of digital delivery, centralized control of standardised engineering main data, and shared virtual engineering cloud resources. The overall engineering design capability and project execution effectiveness of the Group were improved, and new momentum was obtained for the networking, digitalisation and intelligence reform of the engineering construction model of the Group.
The Group steadily pushed forward the construction of smart projects and completed a series of smart engineering projects such as the draft of Implementation Detailed Rules for Digital Delivery of Petrochemical Engineering, the pilot application of Zhenhai Refining and Chemical POX Unit Project, the promotion and application of key Sinopec projects with unified engineering material coding, the integration and application of Zhongke Refining and Chemical Integration Project in the 4D pipeline construction management system, and the research, development and independent innovation of three-dimensional design in equipment and structure. The standardised design, centralised procurement and modular construction have enabled the Group to transform and upgrade its digitalisation. The Group has effectively guaranteed the high level, high quality and high efficiency for completion of the owner's contracts with first-class platform, excellent design and high-quality service.
Market and Business Outlook
Looking forward to 2020, there are still many uncertain factors affecting the recovery of the world economy and the complicated situation where domestic and international contradictions exist simultaneously may continue. The year of 2020 is the last year of China's 13th Five-Year Plan and the decisive year for building a comprehensive well-off society. Chinese economy will overcome the impact of the COVID-19 and continue to maintain a development with stable growth rate, optimised structure, and kinetic energy conversion. In the future, the development of the energy industry will adjust the pace with improved quality and efficiency, and the patten of refining and chemical industry will constantly change. Certain projects of the national "seven major national petrochemical industry bases" and Sinopec Group's "four world-class refining bases" will continue to progress. Private investments will remain active, and international large energy companies such as Exxon Mobil, BASF and SABIC will actively be involved in the Chinese market. The business development of the Group will meet new opportunities and challenges.
In 2020, the Group will enthusiastically seize the market opportunities at home and abroad, fully leverage its advantages such as collectivisation, integration and large scale, continuously enhance its core competitive edge, propel its sustainable and healthy development. In 2020, the Group 's domestic new contract value target is RMB46 billion, and the target of overseas new contract value is USD1.5 billion.
Summary of Financial Data and Indicators Prepared in Accordance with International Financial
Reporting Standards ("IFRS")
As at 31
As at 31
Changes from the
Total equity attributable to equity holders
of the Company
Net assets per share attributable to
equity holders of the Company (RMB)
For the twelve months ended 31
Changes over the
Profit before taxation
Net profit attributable to equity holders of
Basic earnings per share (RMB)
Net cash flow generated from operating
Net cash flow generated from operating
For the twelve months ended 31 December
Gross profit margin (%)
Net profit margin (%)
Return on assets (%)
Return on equity (%)
Return on invested capital (%)
As at 31 December
As at 31 December
Asset-liability ratio (%)
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 Chinese energy and chemical engineering company with strong international competitiveness. The Group can provide domestic and overseas clients with overall solutions for petrol refining, chemical engineering, aromatics, coal chemicals, inorganic chemicals, pharmaceutical chemicals, clean energy, storage and transportation facilities, environmental protection and energy saving and other sectors, including engineering consulting, technology licensing, project management contractor, financing assistance, EPC contracting, as well as design, procurement, construction and installation, lifting and transportation of large equipment, pre-commissioning, start-up and other industrial chain services.
After more than 60 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 nearly 10,000 high-quality professionals with extensive project management and implementation experience, and owns and cooperatively owns advanced patents and know-how in core business areas. The Group has delivered on schedule hundreds of modern factories with enormous investment, advanced technology, complicated process 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, established an extensive and stable client base, and enjoys remarkable industrial influence and social reputation.
In the future, the Group will continue to focus on the development strategies of "energy and petrochemical-oriented, innovation-driven, globalization-targeted and value-focused", enhance exploration and development in the fields of hydrogen energy, renewable energy and new materials, and create a new momentum in achieving the vision of "building a world-class engineering company".
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 /Zheng Zhexia
Tel: (86) 10 5673 0521/ (86) 10 5673 0523 / (86) 10 5673 0525,
Email: [email protected];
Ray Sun / Jack Liu / Sherry Ren
Tel: (852) 2522 1838 / (852) 2522 1368
Fax: (852) 2521 9955
Email: [email protected]
SOURCE SINOPEC Engineering (Group) Co., Ltd.