Exhibit 99.1
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
PETROCHINA COMPANY LIMITED
(A joint stock limited company incorporated in the People’s Republic of China with limited liability)
(Hong Kong Stock Exchange Stock Code: 857; Shanghai Stock Exchange Stock Code: 601857)
ANNOUNCEMENT
Third Quarterly Report of 2019
1. | Important Notice |
1.1. | The Board of Directors, the Supervisory Committee and the Directors, Supervisors and Senior Management of PetroChina Company Limited (the “Company”) warrant that there are no material omissions from, or misrepresentation or misleading statements contained in this quarterly report, and jointly and severally accept full responsibility for the truthfulness, accuracy and completeness of the information contained in this quarterly report. |
1.2. | This quarterly report has been approved at the fifth meeting of the Board of Directors of the Company in 2019. All Directors have attended the meeting of the Board of Directors. |
1.3. | Mr. Wang Yilin, Chairman of the Board of Directors of the Company, Mr. Hou Qijun, Director and President of the Company, and Mr. Chai Shouping, Chief Financial Officer of the Company, warrant the truthfulness, accuracy and completeness of the financial statements set out in this quarterly report. |
1.4. | The financial statements of the Company and its subsidiaries (the “Group”) have been prepared in accordance with the China Accounting Standards (“CAS”) and the International Financial Reporting Standards (“IFRS”), respectively. The third quarterly report of the Company is unaudited. |
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2. | Basic Information of the Company |
2.1 | Key Financial Data |
2.1.1 | Key Financial Data and Financial Indicators Prepared under IFRS |
Unit: RMB Million | ||||||||||||
Items | As at the end of the reporting period | As at the end of the preceding year | Changes from the end of the preceding year to the end of the reporting period (%) | |||||||||
Total assets | 2,700,922 | 2,440,877 | 10.7 | |||||||||
Equity attributable to owners of the Company | 1,225,255 | 1,213,783 | 0.9 | |||||||||
Items | From the beginning of the year to the end of the reporting period | From the beginning of the preceding year to the end of the preceding reporting period | Changes over the same period of the preceding year (%) | |||||||||
Net cash flows from operating activities | 239,396 | 259,054 | (7.6 | ) |
Unit: RMB Million | ||||||||||||||||||||||||
For the three months ended September 30 (July-September) | For the nine months ended September 30 (January-September) | |||||||||||||||||||||||
Items | 2019 | 2018 | Changes over the same period of the preceding year (%) | 2019 | 2018 | Changes over the same period of the preceding year (%) | ||||||||||||||||||
Revenue | 618,143 | 607,080 | 1.8 | 1,814,402 | 1,726,717 | 5.1 | ||||||||||||||||||
Profit attributable to owners of the Company | 8,830 | 21,220 | (58.4 | ) | 37,253 | 48,661 | (23.4 | ) | ||||||||||||||||
Return on net assets (%) | 0.72 | 1.74 | | (1.02) percentage points | | 3.04 | 4.00 | | (0.96 percentage point | )
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Basic earnings per share (RMB Yuan) | 0.048 | 0.116 | (58.4 | ) | 0.204 | 0.266 | (23.4 | ) | ||||||||||||||||
Diluted earnings per share (RMB Yuan) | 0.048 | 0.116 | (58.4 | ) | 0.204 | 0.266 | (23.4 | ) |
Note: | In the first three quarters of 2019, due to the implementation of the new lease standards, and the acquisition of the equity of Dalian West Pacific Petrochemical Co., Ltd. consolidated for accounting treatment under the same control, the relevant indicators of the beginning of the year and the same period of the previous year were retrospectively adjusted by the Group. |
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2.1.2 | Key Financial Data and Financial Indicators Prepared under CAS |
Unit: RMB Million | ||||||||||||
Items | As at the end of the reporting period | As at the end of the preceding year | Changes from the end of the preceding year to the end of the reporting period (%) | |||||||||
Total assets | 2,701,213 | 2,441,169 | 10.7 | |||||||||
Equity attributable to equity holders of the Company | 1,225,538 | 1,214,067 | 0.9 | |||||||||
Items | From the beginning of the year to the end of the reporting period | From the beginning of the preceding year to the end of the preceding reporting period | Changes over the same period of the preceding year (%) | |||||||||
Net cash flows used for operating activities | 239,396 | 259,054 | (7.6 | ) |
Unit: RMB Million | ||||||||||||||||||||||||
Items | For the three months ended September 30 (July-September) | For the nine months ended September 30 (January-September) | ||||||||||||||||||||||
2019 | 2018 | Changes over the same period of the preceding year (%) | 2019 | 2018 | Changes over the same period of the preceding year (%) | |||||||||||||||||||
Operating income | 618,143 | 607,080 | 1.8 | 1,814,402 | 1,726,717 | 5.1 | ||||||||||||||||||
Net profit attributable to equity holders of the Company | 8,862 | 21,219 | (58.2 | ) | 37,282 | 48,658 | (23.4 | ) | ||||||||||||||||
Net profit after deductingnon-recurring profit/loss items attributable to equity holders of the Company | 10,272 | 28,135 | (63.5 | ) | 40,658 | 58,715 | (30.8 | ) | ||||||||||||||||
Weighted average return on net assets (%) | 0.73 | 1.76 | | (1.03) percentage points |
| 3.06 | 4.04 | | (0.98) percentage point | | ||||||||||||||
Basic earnings per share (RMB Yuan) | 0.048 | 0.116 | (58.2 | ) | 0.204 | 0.266 | (23.4 | ) | ||||||||||||||||
Diluted earnings per share (RMB Yuan) | 0.048 | 0.116 | (58.2 | ) | 0.204 | 0.266 | (23.4 | ) |
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Unit: RMB Million | ||||
Non-recurring profit/loss items | For the nine months ended September 30, 2019 profit/(loss) | |||
Net profit or loss on disposal ofnon-current assets | (2,826 | ) | ||
Government grants recognised in the income statement | 755 | |||
Reversal of provisions for bad debts against receivables | 719 | |||
Net profit or loss arising from disposal of subsidiary | 111 | |||
Othernon-operating income and expenses | (2,946 | ) | ||
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Sub-total | (4,187 | ) | ||
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Tax impact ofnon-recurring profit/loss items | 774 | |||
Impact ofnon-controlling interests | 37 | |||
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Total | (3,376 | ) | ||
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2.1.3 | Differences between CAS and IFRS |
✓ Applicable ☐ Inapplicable
The consolidated net profit for the nine months ended September 30, 2019 under IFRS and CAS were RMB53,475 million and RMB53,537 million, respectively, with a difference of RMB62 million; the consolidated shareholders’ equity as at the end of the reporting period under IFRS and CAS were RMB1,432,617 million and RMB1,432,901 million, respectively, with a difference of RMB284 million, which was primarily due to the revaluation for assets other than fixed assets and oil and gas properties revalued in 1999. During the restructuring in 1999, a valuation was carried out for assets and liabilities injected by China National Petroleum Corporation (中國石油天然氣集團公司, now renamed中國石油天然氣集團有限公司 on 19 December 2017, “CNPC” before and after the change of name). The valuation results on assets other than fixed assets and oil and gas properties were not recognised in the financial statements prepared under IFRS.
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2.2 | Total Number of Shareholders, Shareholdings of Top Ten Shareholders and Shareholdings of Top Ten Holders of Marketable Shares (or Holders of Shares Without Selling Restrictions) as at the End of the Reporting Period |
Number of shareholders as at the end of the reporting period | 610,397 shareholders including 603,957 holders of A shares and 6,440 holders of H shares (including 163 holders of the American Depository Shares) |
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Shareholdings of the top ten shareholders | ||||||||||||||||||
Name of shareholders | Nature of shareholder | Percentage of Shareholdings (%) | Number of shares held | Number of shares with selling restrictions | Number of pledged or frozen shares | |||||||||||||
CNPC | State-owned | 80.56 | | 147,442,339,136 | (1) | 0 | 0 | |||||||||||
HKSCC Nominees Limited(2) | Overseas Legal Person | 11.42 | 20,894,602,698 | (3) | 0 | 0 | ||||||||||||
CNPC-CSC-17 CNPC E2 Pledge and Trust Special Account | State-owned Legal Person | 2.09 | 3,819,987,625 | 0 | 3,819,987,625 | |||||||||||||
CNPC-CSC-17 CNPC EB Pledge and Trust Special Account | State-owned Legal Person | 1.12 | 2,051,488,603 | 0 | 2,051,488,603 | |||||||||||||
China Securities Finance Corporation Limited | State-owned Legal Person | 0.62 | 1,139,138,704 | 0 | 0 | |||||||||||||
Beijing Chengtong Financial Holding Investment Co., Ltd. | State-owned Legal Person | 0.49 | 902,739,556 | 0 | 0 | |||||||||||||
Guoxin Investment Co., Ltd. | State-owned Legal Person | 0.44 | 797,794,036 | 0 | 0 | |||||||||||||
China Baowu Steel Group Corporation Limited | State-owned Legal Person | 0.34 | 624,000,000 | 0 | 0 | |||||||||||||
China Merchants Bank Co., Ltd.-Bose CSI Central SOE Innovation-driven ETF Securities Investment Fund(4) | Other | 0.15 | 271,701,100 | 0 | 0 | |||||||||||||
Hong Kong Securities Clearing Company Limited ( the “HKSCC”) (5) | Overseas Legal Person | 0.13 | 239,379,010 | 0 | 0 |
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Shareholdings of the top ten shareholders without selling restrictions | ||||||||
Name of shareholders | Number of shares held | Type of shares | ||||||
CNPC | 147,442,339,136 | A shares | ||||||
HKSCC Nominees Limited | 20,894,602,698 | H shares | ||||||
CNPC-CSC-17 CNPC E2 Pledge and Trust Special Account | 3,819,987,625 | A shares | ||||||
CNPC-CSC-17 CNPC EB Pledge and Trust Special Account | 2,051,488,603 | A shares | ||||||
China Securities Finance Corporation Limited | 1,139,138,704 | A shares | ||||||
Beijing Chengtong Financial Holding Investment Co., Ltd. | 902,739,556 | A shares | ||||||
Guoxin Investment Co., Ltd. | 797,794,036 | A shares | ||||||
China Baowu Steel Group Corporation Limited | 624,000,000 | A shares | ||||||
China Merchants Bank Co., Ltd. -Bosera CSI Central SOE Innovation-driven ETF Securities Investment Fund | 271,701,100 | A shares | ||||||
HKSCC | 239,379,010 | A shares | ||||||
Statement on the connection or activities acting in concert among the above-mentioned shareholders:
Except for HKSCC Nominees Limited and HKSCC that are wholly-owned subsidiaries of Hong Kong Exchanges and Clearing Limited, and HKSCC Nominees Limited, HKSCC and China Securities Finance Corporation Limited that are shareholders of ordinary shares of China Merchants Bank Co., Ltd.,the Company is not aware of any connection among or between the other top ten shareholders or that they are persons acting in concert as provided for in the Measures for the Administration of Acquisitions by Listed Companies. |
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Notes: (1) | Such figure excludes the H shares indirectly held by CNPC through Fairy King Investments Limited, an overseas wholly-owned subsidiary of CNPC. |
(2) | HKSCC Nominees Limited is a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited and acts as nominee on behalf of other corporate or individual shareholders to hold the H shares of the Company. |
(3) | 291,518,000 H shares were indirectly held by CNPC through Fairy King Investments Limited, an overseas wholly-owned subsidiary of CNPC, representing 0.16% of the total issued shares of the Company. These shares were held in the name of HKSCC Nominees Limited. |
(4) | On September 18, 2019, CNPC transferred 155,103,300 A shares in total of the Company to Bosera Asset Management Co., Ltd., Harvest Fund Management Co., Ltd. and GF Fund Management Co., Ltd. in exchange for shares of Central SOE Innovation-driven ETF Securities Investment Fund. |
(5) | HKSCC is a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited and acts as the nominee on behalf of investors of Hong Kong Stock Exchange to hold the A shares of the Company listed on Shanghai Stock Exchange. |
2.3 | Number of Shareholders of Preferred Shares, Shareholdings of Top Ten Shareholders of Preferred Shares and Shareholdings of Top Ten Shareholders of Preferred Shares without Selling Restrictions as at the End of the Reporting Period |
☐ Applicable ✓ Inapplicable
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2.4 | Business Review |
In the first three quarters of 2019, the world economic and trade environment became even more severe and complicated and the economic growth generally slowed down, with comparatively more downward pressure. China’s economy maintained its steady and progressive development with an increase of 6.2% in the GDP as compared with the same period of last year. Its economic operations were maintained in a reasonable range with a certain downward pressure. The demand and supply in the global oil market was generally abundant. The international oil prices fluctuated with a falling tendency after a continuous rise at the beginning of the year and the average price decreased as compared with the same period of last year. The average spot price of North Sea Brent crude oil and the average spot price of the West Texas Intermediate (“WTI”) crude oil were US$64.59 per barrel and US$57.08 per barrel, respectively, representing a decrease of 10.5% and 14.7% as compared with the same period of last year, respectively. The domestic refined products market was of abundant supply and demand, with intensified overcapacity and fierce competition. The market demand for natural gas continued to grow but at a slowing-down rate.
Facing the complex and difficult operating situations domestically and abroad, the Group adhered to the requirements for high-quality development, pursued to its guidelines of steady development, strengthened organization of production and operations, pushed forward business structural adjustment, promoted reform and innovation, and continued to make more efforts in broadening sources of income, reducing costs and improving efficiency, thus having achieved controlled production and operation. Due to reduction in international oil price and intensified competition in the domestic refined oil market, its operating results decreased as compared with the same period of last year. In the first three quarters of 2019, under IFRS, the Group achieved the revenue of RMB1,814,402 million and the net profit attributable to owners of the Company of RMB37,253 million, representing an increase of 5.1% and a decrease of 23.4%, respectively, as compared with the same period of last year. The financial position of the Group stayed stable. The cash flow was favorable and the free cash flow continued to be positive.
In respect of domestic exploration and production business, the Group took initiative in promoting and implementing thespeed-up plan of exploration and development and expanded investment in risk exploration in new fields and key areas, thus making significant progress in the exploration of unconventional oil and gas. Significant discovery was made in Chang 7 oil source bed exploration in Ordos Basin, and significant progress was also made in shale gas exploration in Sichuan Basin. In respect of overseas oil and gas business, the Group strengthened the management and risk controls of key projects, organized the production and operation in an orderly way. In the first three quarters of 2019, the crude oil output of the Group amounted to 682.7 million barrels, representing an increase of 2.9% as compared with the same period of last year. The marketable natural gas output of the Group amounted to 2,892.8 billion cubic feet, representing an increase of 8.7% as compared with the same period of last year. The oil and gas equivalent output was 1,165.0 million barrels, representing an increase of 5.2% as compared with the same period of last year, of which the domestic oil and gas equivalent output was 1,005.0 million barrels, representing an increase of 5.0% as compared with the same period of last year and the overseas oil and gas equivalent output was 160.0 million barrels, representing an increase of 7.0% as compared with the same period of last year. In the first three quarters of 2019, in the exploration and production segment, the Group took proactive measures to pursue itslow-cost strategy and devoted major efforts to promoting the guidelines of broadening sources of income, reducing cost and improving efficiency. The unit oil and gas lifting cost was US$11.28 per barrel, representing a decrease of 1.7% as compared with the same period of last year. Benefiting from the combined effect of such factors as increase in sales volume of crude oil and the increase in both sales volume and price of natural gas, the exploration and production segment achieved an operating profit of RMB76,935 million, representing an increase of 32.9% as compared with RMB57,884 million for the same period of last year and thus maintained as the primary profitable segment of the Group.
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In respect of refining and chemicals, the Group proactively responded toward market change, pushed forward structural adjustment and transformation and upgrading, kept optimizing the allocation of resources and the structure of products, increased the production of marketable and highly profitable products. The Group maintained the high workload production of its chemical production facilities and, while certain of its petrochemical facilities were under routine overhaul, its output of commercialized petrochemical products increased 786 thousand tons as compared with the same period of last year. The Group strengthened benchmarking analysis and control over costs and expenses. In the first three quarters of 2019, the Group processed 905.9 million barrels of crude oil, representing an increase of 4.3% as compared with the same period of last year. The Group produced 86.583 million tons of gasoline, diesel and kerosene, representing an increase of 6.2% as compared with the same period of last year. However, due to such factors as overcapacity in the domestic refining and chemicals industry, reduced profitability and decrease in price of chemical products, in the first three quarters of 2019, the refining and chemicals segment achieved an operating profit of RMB7,133 million, representing a decrease of 81.7% as compared with RMB38,906 million for the same period of last year, of which the refining operations achieved an operating profit of RMB3,410 million, representing a decrease of 88.7% as compared with RMB30,051 million for the same period of last year, and the chemicals operations achieved an operating profit of RMB3,723 million, representing a decrease of 58.0% as compared with RMB8,855 million for the same period of last year.
In respect of marketing, the Group highlighted market analysis and research and judgement, improved marketing strategies, made more efforts in marketing activities, accurately grasped the sales pace and ensured that the resources flow to the high-efficiency markets. The Group also strengthened its expansion in overseas market, ensured a smooth operation of the industrial chain and increase the efficiency and profitability of the industrial chain. In the first three quarters of 2019, the segment sold 138.680 million tons of gasoline, kerosene and diesel, representing an increase of 1.106 million tons or 0.8% as compared with the same period of last year. However, due to such factors as overcapacity, intensified competition in domestic refined oil market and downward trend of the availability of price rate, the marketing segment achieved an operating profit of RMB422 million, representing a decrease of 93.4% as compared with RMB6,424 million for the same period of last year.
In respect of natural gas and pipeline, the Group emphasized the orientation of efficiency and profitability, actively optimized the structure of gas sources, prioritized the marketing of self-produced natural gas to ensure the full sales of it, arranged the procurement of other domestic gas sources and imported gas properly, and strived to control the procurement costs; the Group also optimized marketing strategy, strengthened market development, improved profitability and strengthened the safety management of pipelines to ensure the profitability and efficiency of pipeline operation. In the first three quarters of 2019, as a result of such factors as the change in the price and sales of natural gas as compared with the same period of last year, the natural gas and pipeline segment achieved an operating profit of RMB21,950 million, representing an increase of 11.3% as compared with RMB19,719 million for the same period of last year. As a result of the change in foreign exchange rates and the increase in procurement costs, the net loss incurred from sales of imported gas and LNG in the natural gas and pipeline segment amounted to RMB21,764 million, representing an increase in loss of RMB1,807 million as compared with the same period of last year. The Group will make further efforts in loss-control of imported gas.
In the first three quarters of 2019, the average realised price for crude oil of the Group was US$61.49 per barrel, representing a decrease of 9.5% as compared with the same period of last year, of which the domestic realised price was US$61.40 per barrel, representing a decrease of 7.9% as compared with the same period of last year. The average realised price for natural gas was US$5.49 per thousand cubic feet, representing a decrease of 4.0% as compared with the same period of last year, of which the domestic realised price was US$5.94 per thousand cubic feet, representing an increase of 0.7% as compared with the same period of last year.
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Summary of Key Operating Data for the First Three Quarters of 2019
Operating Data | Unit | For the nine months ended September 30 | Changes over the same period of the preceding year (%) | |||||||||||||
2019 | 2018 | |||||||||||||||
Crude oil output | Million barrels | 682.7 | 663.3 | 2.9 | ||||||||||||
of which: domestic | Million barrels | 556.9 | 549.2 | 1.4 | ||||||||||||
overseas | Million barrels | 125.8 | 114.1 | 10.3 | ||||||||||||
Marketable natural gas output | Billion cubic feet | 2,892.8 | 2,661.6 | 8.7 | ||||||||||||
of which: domestic | Billion cubic feet | 2,688.0 | 2,449.5 | 9.7 | ||||||||||||
overseas | Billion cubic feet | 204.8 | 212.1 | (3.4 | ) | |||||||||||
Oil and natural gas equivalent output | Million barrels | 1,165.0 | 1,107.0 | 5.2 | ||||||||||||
of which: domestic | Million barrels | 1,005.0 | 957.5 | 5.0 | ||||||||||||
overseas | Million barrels | 160.0 | 149.5 | 7.0 | ||||||||||||
Processed crude oil | Million barrels | 905.9 | 868.9 | 4.3 | ||||||||||||
Gasoline, kerosene and diesel output | Thousand tons | 86,583 | 81,516 | 6.2 | ||||||||||||
of which: Gasoline | Thousand tons | 37,084 | 33,260 | 11.5 | ||||||||||||
Kerosene | Thousand tons | 9,378 | 8,300 | 13.0 | ||||||||||||
Diesel | Thousand tons | 40,121 | 39,956 | 0.4 | ||||||||||||
Gasoline, kerosene and diesel sales | Thousand tons | 138,680 | 137,575 | 0.8 | ||||||||||||
of which: Gasoline | Thousand tons | 56,850 | 55,489 | 2.5 | ||||||||||||
Kerosene | Thousand tons | 15,020 | 15,184 | (1.1 | ) | |||||||||||
Diesel | Thousand tons | 66,810 | 66,902 | (0.1 | ) | |||||||||||
Output of key chemical products | ||||||||||||||||
Ethylene | Thousand tons | 4,290 | 4,008 | 7.0 | ||||||||||||
Synthetic resin | Thousand tons | 7,018 | 6,650 | 5.5 | ||||||||||||
Synthetic fibre raw materials and polymer | Thousand tons | 983 | 1,032 | (4.7 | ) | |||||||||||
Synthetic rubber | Thousand tons | 669 | 630 | 6.2 | ||||||||||||
Urea | Thousand tons | 919 | 802 | 14.6 |
Notes: | Figures have been converted at the rate of 1 ton of crude oil = 7.389 barrels and 1 cubic metre of natural gas = 35.315 cubic feet. |
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3. | Significant Events |
3.1 | Significant changes in key accounting items and financial indicators under CAS and explanation of such changes |
✓ Applicable ☐ Inapplicable
Unit: RMB Million
Items | September 30, 2019 | December 31, 2018 | Changes (%) | Key explanation of the changes | ||||||||||
Cash at bank and on hand | 147,692 | 95,489 | 54.7 | Mainly due to the change of fund position of the Group | ||||||||||
Accounts receivable | 77,689 | 59,522 | 30.5 | Mainly due to the increase in the sales volume of crude oil, refined oil, natural gas, etc. | ||||||||||
Receivables financing | 9,558 | 16,308 | (41.4 | ) | Mainly due to the increase in endorsement, transfer and discount of bank acceptance bills for the current period | |||||||||
Advances to suppliers | 27,463 | 17,554 | 56.4 | Mainly due to the increase in prepayments such as those for goods and materials | ||||||||||
Other receivables | 27,051 | 17,415 | 55.3 | Mainly due to the increase in VAT refunds and other items | ||||||||||
Right-of-use assets | 181,628 | — | — | In accordance with the Accounting Standards for Enterprises No.21 – Lease (the “new lease standard”) effective from January 1, 2019, the comparative financial statements no longer need adjustment in respect of the recognition of theright-of-use assets (please refer to 3.6 Other significant events) | ||||||||||
Long-term prepaid expenses | 9,985 | 28,529 | (65.0 | ) | Manly due to inclusion of the prepaid rents originally included in long-term prepaid expenses into right—of—use assets according to the new lease standard | |||||||||
Short-term borrowings | 99,080 | 69,780 | 42.0 | Mainly due to the increase in borrowings for production and operation | ||||||||||
Employee compensation payable | 16,744 | 10,189 | 64.3 | Mainly due to the increase in the outstanding amount of remuneration payable as compared with that at the end of last year | ||||||||||
Taxes payable | 50,308 | 83,288 | (39.6 | ) | Mainly due to the decrease in the outstanding amount of taxes payable as compared with that at the end of last year | |||||||||
Other payables | 80,644 | 33,922 | 137.7 | Mainly due to the increase in other payables recognized based on volume of business | ||||||||||
Debentures payable | 136,518 | 91,817 | 48.7 | Mainly due to the issuance of new corporate debentures during the current period | ||||||||||
Lease liabilities | 157,123 | — | — | In accordance with the new lease standard effective from January 1, 2019, the comparative financial statements no longer need adjustment in respect of the recognition of the lease liabilities (please refer to 3.6 Other significant events) |
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Items | For the nine months ended September 30 | Changes (%) | Key explanation of the changes | |||||||||||
2019 | 2018 | |||||||||||||
Interest expenses | 22,647 | 16,971 | 33.4 | Mainly due to the generation of interest expense for recognition of lease liabilities according to the new lease standard | ||||||||||
Investment income | 7,123 | 5,398 | 32.0 | Mainly due to the increase in investment income from associated companies and joint ventures that should be recognised | ||||||||||
Credit losses | 732 | 11 | 6,554.5 | Mainly due to the increase in reversal of provision for bad debt of account receivable | ||||||||||
Asset impairment losses | (777 | ) | (162 | ) | 379.6 | Mainly due to the increase in provision for inventory depreciation | ||||||||
Gains from asset disposals | 203 | 109 | 86.2 | Mainly due to the increase in disposal of low and no efficiency assets | ||||||||||
Non-operating income | 2,434 | 1,486 | 63.8 | Mainly due to the increase in payables that cannot be paid and governmental subsidy for demolition | ||||||||||
Non-operating expenses | (8,051 | ) | (14,629 | ) | (45.0 | ) | Mainly due to the decrease in the loss of disposal of oil and gas assets and fixed assets | |||||||
Net cash flows used for investing activities | (207,391 | ) | (153,776 | ) | 34.9 | Mainly due to the increase in capital expenditures in cash | ||||||||
Net cash flows used for financing activities | (9,151 | ) | (76,747 | ) | (88.1 | ) | Mainly due to the increase in new borrowings |
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3.2 | Developments and impacts of significant events as well as the analysis of and explanation for the solutions |
☐ Applicable ✓ Inapplicable
3.3 | Status of fulfilment of undertakings given by the Company and shareholders with a shareholding of 5% or more |
✓ Applicable ☐ Inapplicable
During the reporting period, the undertaking given by CNPC, the controlling shareholder of the Company, and the fulfilment thereof were consistent with the information disclosed in the section headed “Significant Events” of the 2019 Interim Report of the Company. There have been no events affecting the performance of these undertakings.
3.4 | Caution and explanation as to the anticipated accumulated losses or significant changes over the same period of the preceding year |
☐ Applicable ✓ Inapplicable
3.5 | Securities Investment |
☐ Applicable ✓ Inapplicable
3.6 | Other Significant Events |
✓ Applicable ☐ Inapplicable
3.6.1 | Changes in CAS and the effects |
(a) New leases standard
The Ministry of Finance (MOF) released the new leases standard in 2018. The new leases standard revises the provisions of Accounting Standards for Business Enterprises No. 21 – Leases (“the Old Lease Standard”) issued by MOF in 2006. The Group has applied the new leases standard since January 1, 2019, and adjusted the relevant contents of accounting policies.
The New Lease Standard improved the definition of the lease, under which the Group assesses whether a contract is or contains a lease based on the new definition of a lease. For contracts entered into before the date of initial application of the New Lease Standard, the Group has elected not to reassess whether the existing contracts are or contain leases at the date of initial application of the New Lease Standard.
Under the Old Lease Standard, the Group, as a lessee, previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards incidental to ownership of the leased asset to the Group.
The Group has elected to recognise the cumulative effect of initial application of the New Lease Standard as an adjustment to the opening balance of retained earnings and the amount of other relevant items in the financial statements at the year of initial application of the New Lease Standard, with no adjustments to the information of the comparative period.
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For the operating leases existing before the date of initial application of the New Lease Standard, the lease liability is measured at the present value of the remaining lease payments at the date of initial application of the New Lease Standard, discounted at the Group’s incremental borrowing rate at the date of initial application of the New Lease Standard, and theright-of-use asset is measured at an amount equal to the lease liability, adjusted by the amount of any prepaid lease payments.
For details of the changes to the above standard and the effects, refer to “4(31) Changes to key accounting policies” in the Group’s 2019 interim reports prepared under CAS.
(b) Presentation of financial statements
The MOF released the Notice of the MOF on the Revised Format of 2019 Financial Statements for General Enterprises (Cai Kuai [2019] No. 6) in April 2019, and the Notice of the MOF on the Revised Format of Consolidated Financial Statements (Cai Kuai [2019] No.16) in September, 2019.
The Group has prepared financial statements for the nine months ended September 30, 2019 in accordance with CaiKuai [2019] No.6 and Cai Kuai [2019] No.16. The Group has applied the new presentation requirements retrospectively.
According to the above requirements, notes receivable and accounts receivable are included in receivables financing and accounts receivable, respectively, while notes payable and accounts payable are included in notes payable and accounts payable, respectively.
For details of the changes to the above standard and the effects, refer to “4(31) Changes to key accounting policies” in the Group’s 2019 interim reports prepared under CAS.
(c) ASBE 7 (2019)
The MOF released Accounting Standards for Business Enterprises No. 7 – Exchange ofNon-monetary Assets (Revised) (“ASBE 7 (2019)”) in May 2019. The ASBE 7 (2019) elaborates the scope of application with respect to the standards on exchange ofnon-monetary assets, standardises the timing of recognition of assets exchanged in and the timing of derecognition of assets exchanged out and stipulates the accounting treatment in case of inconsistencies between the two timing , revises the measurement basis for the occurrence of simultaneously exchanging in or exchanging out a number of assets in the exchange ofnon-monetary assets based on the measurement of the fair value, and adds the additional disclosure requirements regarding whether the exchange ofnon-monetary assets has commercial substance and its reasons.
The ASBE 7 (2019) has been applied on June 10, 2019, adjustment shall be made to the exchange ofnon-monetary assets generated from January 1, 2019 to the date of the Standard application based on the standard and retrospective adjustment is not required for the exchange ofnon-monetary assets generated before January 1, 2019. The adoption of the standard did not have any material impact on the financial position and financial performance of the Group.
(d) ASBE 12 (2019)
The MOF released Accounting Standards for Business Enterprises No. 12 – Debt Restructuring (Revised) (“ASBE 12 (2019)”) in May 2019. The ASBE 12 (2019) revised the definition of debt restructuring, defines the scope of application of the standard and stipulates the rules applicable to the related standards for financial instruments in relation to the recognition, measurement and presentation of the financial instruments in terms of debt restructuring.
13
The ASBE 12 (2019) has been applied on June 17, 2019, adjustments shall be made to the debt restructuring incurred from January 1, 2019 to the date of the standard application based on the standard and retrospective adjustment is not required for the debt restructuring generated before January 1, 2019. The adoption of the Standard did not have any material impact on the financial position and financial performance of the Group.
3.6.2 | Changes in IFRS and the effects |
The Group has initially adopted IFRS 16 from January 1, 2019.
IFRS 16 introduced a single,on-balance sheet accounting model for lessees. As a result, the Group, as a lessee, has recognisedright-of-use assets representing its rights to use the underlying assets and lease liabilities representing its obligation to make lease payments. Lessor accounting remains similar to previous accounting policies.
The Group has applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at January 1, 2019. Accordingly, the comparative information presented for 2018 has not been restated.
The Group has elected not to recogniseright-of-use assets and lease liabilities for some leases oflow-value assets and short-term lease. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
For details of the changes to the above standard and the effects, refer to “4. Changes to key accounting policies” in the Group’s 2019 interim reports prepared under IFRS.
3.6.3 | Official publication of the Resource Tax Law |
On August 26, 2019, the Resource Tax Law of the People’s Republic of China (the “Resource Tax Law”) was reviewed and adopted at the 12th Session of the Standing Committee of the Thirteenth National People’s Congress, and shall come into force on September 1, 2020. The Resource Tax Law will maintain the resource tax reduction and exemption policies on oil and gas resources, namely the crude oil and natural gas used for heating in the process of exploiting crude oil and transporting crude oil within the scope of oil fields shall be exempted from resource tax; and the oil and natural gas exploited fromlow-abundance oil and gas fields, high-sulfur natural gas, tertiary oil recovery and the crude oil and natural gas exploited from deepwater oil and gas fields, heavy oil and high pour-point oil shall enjoy a reduction of resource tax.
This matter does not affect the continuity of the Group’s business operation and the stability of the Group’s management, and is helpful to the sustainable and healthy development of the exploration and production business of the Group and the continuous improvement of its operating results.
14
By Order of the Board of Directors
PetroChina Company Limited
Wang Yilin
Chairman
Beijing, the PRC
October 30, 2019
As at the date of this announcement, the Board of Directors of the Company comprises Mr. Wang Yilin as the Chairman; Mr. Zhang Wei as Vice Chairman andnon-executive director; Mr. Liu Yuezhen, Mr. Liu Hongbin, Mr. Jiao Fangzheng and Mr. Duan Liangwei asnon-executive directors; Mr. Hou Qijun as executive director; and Mr. Lin Boqiang, Mr. Zhang Biyi, Ms. Elsie LeungOi-sie, Mr. Tokuchi Tatsuhito and Mr. Simon Henry as independentnon-executive directors.
This announcement is published in English and Chinese. In the event of any inconsistency between the two versions, the Chinese version shall prevail.
15
Appendix
A. Financial statements for the third quarter of 2019 prepared in accordance with CAS
1. | Consolidated Balance Sheet |
September 30, 2019 | December 31, 2018 | |||||||
ASSETS | RMB million | RMB million | ||||||
Current assets | ||||||||
Cash at bank and on hand | 147,692 | 95,489 | ||||||
Accounts receivable | 77,689 | 59,522 | ||||||
Receivables financing | 9,558 | 16,308 | ||||||
Advances to suppliers | 27,463 | 17,554 | ||||||
Other receivables | 27,051 | 17,415 | ||||||
Inventories | 167,973 | 177,577 | ||||||
Other current assets | 63,364 | 54,376 | ||||||
|
|
|
| |||||
Total current assets | 520,790 | 438,241 | ||||||
|
|
|
| |||||
Non-current assets | ||||||||
Long-term equity investments | 97,904 | 89,432 | ||||||
Investments in other equity instruments | 867 | 760 | ||||||
Fixed assets | 674,006 | 689,306 | ||||||
Construction in progress | 255,752 | 219,623 | ||||||
Oil and gas properties | 777,512 | 800,475 | ||||||
Right-of-use assets | 181,628 | — | ||||||
Intangible assets | 79,102 | 77,272 | ||||||
Goodwill | 43,013 | 42,273 | ||||||
Long-term prepaid expenses | 9,985 | 28,529 | ||||||
Deferred tax assets | 26,125 | 23,498 | ||||||
Othernon-current assets | 34,529 | 31,760 | ||||||
|
|
|
| |||||
Totalnon-current assets | 2,180,423 | 2,002,928 | ||||||
|
|
|
| |||||
TOTAL ASSETS | 2,701,213 | 2,441,169 | ||||||
|
|
|
|
/s/ Wang Yilin Chairman | /s/ Hou Qijun Director and President | /s/ Chai Shouping Chief Financial Officer | ||
Wang Yilin | Hou Qijun | Chai Shouping |
16
1. Consolidated Balance Sheet (Continued)
September 30, 2019 | December 31, 2018 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | RMB million | RMB million | ||||||
Current liabilities | ||||||||
Short-term borrowings | 99,080 | 69,780 | ||||||
Notes payable | 8,430 | 8,127 | ||||||
Accounts payable | 221,447 | 246,671 | ||||||
Contract liabilities | 84,110 | 68,144 | ||||||
Employee compensation payable | 16,744 | 10,189 | ||||||
Taxes payable | 50,308 | 83,288 | ||||||
Other payables | 80,644 | 33,922 | ||||||
Current portion ofnon-current liabilities | 78,090 | 75,370 | ||||||
Other current liabilities | 9,649 | 939 | ||||||
|
|
|
| |||||
Total current liabilities | 648,502 | 596,430 | ||||||
|
|
|
| |||||
Non-current liabilities | ||||||||
Long-term borrowings | 157,107 | 177,605 | ||||||
Debentures payable | 136,518 | 91,817 | ||||||
Lease liabilities | 157,123 | — | ||||||
Provisions | 138,560 | 132,780 | ||||||
Deferred tax liabilities | 17,570 | 17,022 | ||||||
Othernon-current liabilities | 12,932 | 16,339 | ||||||
|
|
|
| |||||
Totalnon-current liabilities | 619,810 | 435,563 | ||||||
|
|
|
| |||||
Total liabilities | 1,268,312 | 1,031,993 | ||||||
|
|
|
| |||||
Shareholders’ equity | ||||||||
Share capital | 183,021 | 183,021 | ||||||
Capital surplus | 127,300 | 129,199 | ||||||
Other comprehensive income | (28,324 | ) | (32,397 | ) | ||||
Special reserve | 16,529 | 13,831 | ||||||
Surplus reserves | 194,245 | 194,245 | ||||||
Undistributed profits | 732,767 | 726,168 | ||||||
|
|
|
| |||||
Equity attributable to equity shareholders of the Company | 1,225,538 | 1,214,067 | ||||||
Non-controlling interests | 207,363 | 195,109 | ||||||
|
|
|
| |||||
Total shareholders’ equity | 1,432,901 | 1,409,176 | ||||||
|
|
|
| |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 2,701,213 | 2,441,169 | ||||||
|
|
|
|
/s/ Wang Yilin Chairman | /s/ Hou Qijun Director and President | /s/ Chai Shouping Chief Financial Officer | ||
Wang Yilin | Hou Qijun | Chai Shouping |
17
2. Company Balance Sheet
September 30, 2019 | December 31, 2018 | |||||||
ASSETS | RMB million | RMB million | ||||||
Current assets | ||||||||
Cash at bank and on hand | 32,303 | 15,309 | ||||||
Accounts receivable | 11,079 | 10,174 | ||||||
Receivables financing | 3,660 | 8,160 | ||||||
Advances to suppliers | 13,897 | 6,267 | ||||||
Other receivables | 19,961 | 14,316 | ||||||
Inventories | 108,030 | 114,952 | ||||||
Other current assets | 46,325 | 46,082 | ||||||
|
|
|
| |||||
Total current assets | 235,255 | 215,260 | ||||||
|
|
|
| |||||
Non-current assets | ||||||||
Long-term equity investments | 395,574 | 388,818 | ||||||
Investments in other equity instruments | 422 | 390 | ||||||
Fixed assets | 335,161 | 337,629 | ||||||
Construction in progress | 165,755 | 151,366 | ||||||
Oil and gas properties | 549,028 | 557,121 | ||||||
Right-of-use assets | 105,381 | — | ||||||
Intangible assets | 60,310 | 58,890 | ||||||
Long-term prepaid expenses | 10,101 | 22,761 | ||||||
Deferred tax assets | 19,023 | 17,910 | ||||||
Othernon-current assets | 11,339 | 7,884 | ||||||
|
|
|
| |||||
Totalnon-current assets | 1,652,094 | 1,542,769 | ||||||
|
|
|
| |||||
TOTAL ASSETS | 1,887,349 | 1,758,029 | ||||||
|
|
|
|
/s/ Wang Yilin Chairman | /s/ Hou Qijun Director and President | /s/ Chai Shouping Chief Financial Officer | ||
Wang Yilin | Hou Qijun | Chai Shouping |
18
2. Company Balance Sheet (Continued)
September 30, 2019 | December 31, 2018 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | RMB million | RMB million | ||||||
Current liabilities | ||||||||
Short-term borrowings | 57,734 | 61,873 | ||||||
Notes payable | 7,290 | 6,428 | ||||||
Accounts payable | 90,586 | 115,045 | ||||||
Contract liabilities | 55,904 | 47,184 | ||||||
Employee compensation payable | 13,683 | 7,906 | ||||||
Taxes payable | 31,803 | 58,734 | ||||||
Other payables | 99,889 | 43,862 | ||||||
Current portion ofnon-current liabilities | 18,031 | 63,028 | ||||||
Other current liabilities | 5,821 | 217 | ||||||
|
|
|
| |||||
Total current liabilities | 380,741 | 404,277 | ||||||
|
|
|
| |||||
Non-current liabilities | ||||||||
Long-term borrowings | 94,467 | 72,166 | ||||||
Debentures payable | 133,000 | 85,000 | ||||||
Lease liabilities | 86,060 | — | ||||||
Provisions | 95,989 | 92,017 | ||||||
Othernon-current liabilities | 6,998 | 8,489 | ||||||
|
|
|
| |||||
Totalnon-current liabilities | 416,514 | 257,672 | ||||||
|
|
|
| |||||
Total liabilities | 797,255 | 661,949 | ||||||
|
|
|
| |||||
Shareholders’ equity | ||||||||
Share capital | 183,021 | 183,021 | ||||||
Capital surplus | 127,846 | 127,859 | ||||||
Other comprehensive income | 1,013 | 505 | ||||||
Special reserve | 9,281 | 7,373 | ||||||
Surplus reserves | 183,153 | 183,153 | ||||||
Undistributed profits | 585,780 | 594,169 | ||||||
|
|
|
| |||||
Total shareholders’ equity | 1,090,094 | 1,096,080 | ||||||
|
|
|
| |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 1,887,349 | 1,758,029 | ||||||
|
|
|
|
/s/ Wang Yilin Chairman | /s/ Hou Qijun Director and President | /s/ Chai Shouping Chief Financial Officer | ||
Wang Yilin | Hou Qijun | Chai Shouping |
19
3-1. Consolidated Income Statement
Three months ended September 30 | ||||||||
2019 | 2018 | |||||||
Items | RMB million | RMB million | ||||||
Operating income | 618,143 | 607,080 | ||||||
Less: Cost of sales | (501,163 | ) | (460,077 | ) | ||||
Taxes and surcharges | (57,508 | ) | (57,470 | ) | ||||
Selling expenses | (18,186 | ) | (16,969 | ) | ||||
General and administrative expenses | (15,440 | ) | (17,865 | ) | ||||
Research and development expenses | (2,854 | ) | (2,947 | ) | ||||
Finance expenses | (6,007 | ) | (4,590 | ) | ||||
Including: Interest expenses | 7,450 | 5,670 | ||||||
Interest income | 928 | 1,041 | ||||||
Add: Other income | 3,782 | 2,288 | ||||||
Investment income | 1,890 | 1,459 | ||||||
Including: Income from investment in associates and joint ventures | 1,950 | 1,320 | ||||||
Credit losses | 507 | 6 | ||||||
Asset impairment losses | 7 | (148 | ) | |||||
Gains from asset disposals | 116 | 14 | ||||||
|
|
|
| |||||
Operating profit | 23,287 | 50,781 | ||||||
|
|
|
| |||||
Add:Non-operating income | 910 | 607 | ||||||
Less:Non-operating expenses | (3,208 | ) | (9,583 | ) | ||||
|
|
|
| |||||
Profit before income tax | 20,989 | 41,805 | ||||||
|
|
|
| |||||
Less: Income tax expenses | (6,587 | ) | (15,162 | ) | ||||
|
|
|
| |||||
Net profit | 14,402 | 26,643 | ||||||
|
|
|
| |||||
Classified by continuity of operations: | ||||||||
Net profit from continuous operation | 14,402 | 26,643 | ||||||
Net profit from discontinued operation | — | — | ||||||
Classified by ownership: | ||||||||
Shareholders of the Company | 8,862 | 21,219 | ||||||
Non-controlling interests | 5,540 | 5,424 | ||||||
Earnings per share | ||||||||
Basic earnings per share (RMB Yuan) | 0.048 | 0.116 | ||||||
Diluted earnings per share (RMB Yuan) | 0.048 | 0.116 | ||||||
|
|
|
| |||||
Other comprehensive income | 5,134 | 5,517 | ||||||
|
|
|
| |||||
Other comprehensive income attributable to equity shareholders of the Company, net of tax | 3,321 | 3,733 | ||||||
|
|
|
| |||||
(1) Item that will not be reclassified to profit or loss: | ||||||||
Changes in fair value of investments in other equity instruments | (85 | ) | (11 | ) | ||||
(2) Items that may be reclassified to profit or loss: | ||||||||
Share of other comprehensive income of equity-accounted investee | 100 | 489 | ||||||
Translation differences arising from translation of foreign currency financial statements | 3,306 | 3,255 | ||||||
Other comprehensive income (net of tax) attributable tonon-controlling interests | 1,813 | 1,784 | ||||||
|
|
|
| |||||
Total comprehensive income | 19,536 | 32,160 | ||||||
|
|
|
| |||||
Attributable to: | ||||||||
Equity holders of the Company | 12,183 | 24,952 | ||||||
Non-controlling interests | 7,353 | 7,208 | ||||||
|
|
|
|
/s/ Wang Yilin Chairman | /s/ Hou Qijun Director and President | /s/ Chai Shouping Chief Financial Officer | ||
Wang Yilin | Hou Qijun | Chai Shouping |
20
3-2. Consolidated Income Statement
Nine months ended September 30 | ||||||||
2019 | 2018 | |||||||
Items | RMB million | RMB million | ||||||
Operating income | 1,814,402 | 1,726,717 | ||||||
Less: Cost of sales | (1,446,106 | ) | (1,338,176 | ) | ||||
Taxes and surcharges | (169,927 | ) | (162,762 | ) | ||||
Selling expenses | (51,087 | ) | (48,027 | ) | ||||
General and administrative expenses | (44,045 | ) | (49,666 | ) | ||||
Research and development expenses | (10,541 | ) | (9,031 | ) | ||||
Finance expenses | (20,035 | ) | (14,506 | ) | ||||
Including: Interest expenses | 22,647 | 16,971 | ||||||
Interest income | 2,821 | 2,479 | ||||||
Add: Other income | 8,437 | 6,724 | ||||||
Investment income | 7,123 | 5,398 | ||||||
Including: Income from investment in associates and joint ventures | 6,657 | 5,144 | ||||||
Credit losses | 732 | 11 | ||||||
Asset impairment losses | (777 | ) | (162 | ) | ||||
Gains from asset disposals | 203 | 109 | ||||||
|
|
|
| |||||
Operating profit | 88,379 | 116,629 | ||||||
|
|
|
| |||||
Add:Non-operating income | 2,434 | 1,486 | ||||||
Less:Non-operating expenses | (8,051 | ) | (14,629 | ) | ||||
|
|
|
| |||||
Profit before income tax | 82,762 | 103,486 | ||||||
|
|
|
| |||||
Less: Income tax expenses | (29,225 | ) | (38,228 | ) | ||||
|
|
|
| |||||
Net profit | 53,537 | 65,258 | ||||||
|
|
|
| |||||
Classified by continuity of operations: | ||||||||
Net profit from continuous operation | 53,537 | 65,258 | ||||||
Net profit from discontinued operation | — | — | ||||||
Classified by ownership: | ||||||||
Shareholders of the Company | 37,282 | 48,658 | ||||||
Non-controlling interests | 16,255 | 16,600 | ||||||
Earnings per share | ||||||||
Basic earnings per share (RMB Yuan) | 0.204 | 0.266 | ||||||
Diluted earnings per share (RMB Yuan) | 0.204 | 0.266 | ||||||
|
|
|
| |||||
Other comprehensive income | 8,141 | 3,232 | ||||||
Other comprehensive income attributable to equity shareholders of the Company, net of tax | 4,073 | 555 | ||||||
(1) Item that will not be reclassified to profit or loss: | ||||||||
Changes in fair value of investments in other equity instruments | 53 | (111 | ) | |||||
(2) Items that may be reclassified to profit or loss: | ||||||||
Share of other comprehensive income of equity-accounted investee | 437 | 485 | ||||||
Translation differences arising from translation of foreign currency financial statements | 3,583 | 181 | ||||||
Other comprehensive income (net of tax) attributable tonon-controlling interests | 4,068 | 2,677 | ||||||
|
|
|
| |||||
Total comprehensive income | 61,678 | 68,490 | ||||||
|
|
|
| |||||
Attributable to: | ||||||||
Equity holders of the Company | 41,355 | 49,213 | ||||||
Non-controlling interests | 20,323 | 19,277 | ||||||
|
|
|
|
/s/ Wang Yilin Chairman | /s/ Hou Qijun Director and President | /s/ Chai Shouping Chief Financial Officer | ||
Wang Yilin | Hou Qijun | Chai Shouping |
21
4-1. Income Statement
Three months ended September 30 | ||||||||
2019 | 2018 | |||||||
Items | RMB million | RMB million | ||||||
Operating income | 331,796 | 342,092 | ||||||
Less: Cost of sales | (263,385 | ) | (245,079 | ) | ||||
Taxes and surcharges | (44,109 | ) | (44,338 | ) | ||||
Selling expenses | (12,638 | ) | (11,962 | ) | ||||
General and administrative expenses | (10,411 | ) | (12,478 | ) | ||||
Research and development expenses | (1,820 | ) | (2,142 | ) | ||||
Finance expenses | (4,875 | ) | (3,934 | ) | ||||
Including: Interest expenses | 5,182 | 4,322 | ||||||
Interest income | 332 | 422 | ||||||
Add: Other income | 3,380 | 1,863 | ||||||
Investment income | 1,527 | 3,935 | ||||||
Including: Income from investment in associates and joint ventures | 1,037 | 663 | ||||||
Credit losses | 499 | 5 | ||||||
Asset impairment losses | (1 | ) | (135 | ) | ||||
Gains from asset disposals | 132 | 17 | ||||||
|
|
|
| |||||
Operating profit | 95 | 27,844 | ||||||
|
|
|
| |||||
Add:Non-operating income | 552 | 495 | ||||||
Less:Non-operating expenses | (1,617 | ) | (5,196 | ) | ||||
|
|
|
| |||||
(Loss) / Profit before income tax | (970 | ) | 23,143 | |||||
|
|
|
| |||||
Less: Income tax expenses | 555 | (8,055 | ) | |||||
|
|
|
| |||||
Net (loss) / profit | (415 | ) | 15,088 | |||||
|
|
|
| |||||
Classified by continuity of operations: | ||||||||
Net (loss) / profit from continuous operation | (415 | ) | 15,088 | |||||
Net profit from discontinued operation | — | — | ||||||
|
|
|
| |||||
Earnings per share | ||||||||
Basic earnings per share (RMB Yuan) | (0.002 | ) | 0.082 | |||||
Diluted earnings per share (RMB Yuan) | (0.002 | ) | 0.082 | |||||
|
|
|
| |||||
Other comprehensive income | 187 | 261 | ||||||
Other comprehensive income attributable to equity shareholders of the Company, net of tax | 187 | 261 | ||||||
(1) Item that will not be reclassified to profit or loss: | ||||||||
Changes in fair value of investments in other equity instruments | (28 | ) | (1 | ) | ||||
(2) Item that may be reclassified to profit or loss: | ||||||||
Share of other comprehensive income of equity-accounted investee | 215 | 262 | ||||||
|
|
|
| |||||
Total comprehensive income | (228 | ) | 15,349 | |||||
|
|
|
|
/s/ Wang Yilin Chairman | /s/ Hou Qijun Director and President | /s/ Chai Shouping Chief Financial Officer | ||
Wang Yilin | Hou Qijun | Chai Shouping |
22
4-2. Income Statement
Nine months ended September 30 | ||||||||
2019 | 2018 | |||||||
Items | RMB million | RMB million | ||||||
Operating income | 1,000,923 | 991,938 | ||||||
Less: Cost of sales | (777,698 | ) | (732,186 | ) | ||||
Taxes and surcharges | (130,370 | ) | (127,145 | ) | ||||
Selling expenses | (35,173 | ) | (33,457 | ) | ||||
General and administrative expenses | (29,395 | ) | (33,135 | ) | ||||
Research and development expenses | (8,722 | ) | (7,515 | ) | ||||
Finance expenses | (14,995 | ) | (12,206 | ) | ||||
Including: Interest expenses | 15,518 | 12,923 | ||||||
Interest income | 797 | 913 | ||||||
Add: Other income | 7,282 | 4,914 | ||||||
Investment income | 20,028 | 28,139 | ||||||
Including: Income from investment in associates and joint ventures | 3,247 | 3,069 | ||||||
Credit losses | 764 | 12 | ||||||
Asset impairment losses | 17 | (176 | ) | |||||
Gains from asset disposals | 207 | 126 | ||||||
|
|
|
| |||||
Operating profit | 32,868 | 79,309 | ||||||
|
|
|
| |||||
Add:Non-operating income | 1,817 | 1,150 | ||||||
Less:Non-operating expenses | (5,989 | ) | (8,885 | ) | ||||
|
|
|
| |||||
Profit before income tax | 28,696 | 71,574 | ||||||
|
|
|
| |||||
Less: Income tax expenses | (6,362 | ) | (22,675 | ) | ||||
|
|
|
| |||||
Net profit | 22,334 | 48,899 | ||||||
|
|
|
| |||||
Classified by continuity of operations: | ||||||||
Net profit from continuous operation | 22,334 | 48,899 | ||||||
Net profit from discontinued operation | — | — | ||||||
|
|
|
| |||||
Earnings per share | ||||||||
Basic earnings per share (RMB Yuan) | 0.122 | 0.267 | ||||||
Diluted earnings per share (RMB Yuan) | 0.122 | 0.267 | ||||||
|
|
|
| |||||
Other comprehensive income | 508 | 229 | ||||||
|
|
|
| |||||
Other comprehensive income attributable to equity shareholders of the Company, net of tax | 508 | 229 | ||||||
|
|
|
| |||||
(1) Item that will not be reclassified to profit or loss: | ||||||||
Changes in fair value of investments in other equity instruments | 27 | (30 | ) | |||||
(2) Item that may be reclassified to profit or loss: | ||||||||
Share of other comprehensive income of equity-accounted investee | 481 | 259 | ||||||
|
|
|
| |||||
Total comprehensive income | 22,842 | 49,128 | ||||||
|
|
|
|
/s/ Wang Yilin Chairman | /s/ Hou Qijun Director and President | /s/ Chai Shouping Chief Financial Officer | ||
Wang Yilin | Hou Qijun | Chai Shouping |
23
5. Consolidated Cash Flow Statement
Nine months ended September 30 | ||||||||
2019 | 2018 | |||||||
Items | RMB million | RMB million | ||||||
Cash flows from operating activities | ||||||||
Cash received from sales of goods and rendering of services | 2,057,566 | 2,007,575 | ||||||
Refund of taxes | 2,569 | 4,595 | ||||||
Cash received relating to other operating activities | 3,732 | 2,791 | ||||||
|
|
|
| |||||
Sub-total of cash inflows | 2,063,867 | 2,014,961 | ||||||
|
|
|
| |||||
Cash paid for goods and services | (1,408,400 | ) | (1,355,856 | ) | ||||
Cash paid to and on behalf of employees | (94,856 | ) | (84,131 | ) | ||||
Payments of various taxes | (289,834 | ) | (253,729 | ) | ||||
Cash paid relating to other operating activities | (31,381 | ) | (62,191 | ) | ||||
|
|
|
| |||||
Sub-total of cash outflows | (1,824,471 | ) | (1,755,907 | ) | ||||
|
|
|
| |||||
Net cash flows from operating activities | 239,396 | 259,054 | ||||||
|
|
|
| |||||
Cash flows from investing activities | ||||||||
Cash received from disposal of investments | 1,950 | 10,914 | ||||||
Cash received from returns on investments | 5,095 | 4,580 | ||||||
Net cash received from disposal of fixed assets, oil and gas properties, intangible assets and other long-term assets | 499 | 339 | ||||||
|
|
|
| |||||
Sub-total of cash inflows | 7,544 | 15,833 | ||||||
|
|
|
| |||||
Cash paid to acquire fixed assets, oil and gas properties, intangible assets and other long-term assets | (187,119 | ) | (156,076 | ) | ||||
Cash paid to acquire investments | (27,816 | ) | (13,533 | ) | ||||
|
|
|
| |||||
Sub-total of cash outflows | (214,935 | ) | (169,609 | ) | ||||
|
|
|
| |||||
Net cash flows used for investing activities | (207,391 | ) | (153,776 | ) | ||||
|
|
|
|
/s/ Wang Yilin Chairman | /s/ Hou Qijun Director and President | /s/ Chai Shouping Chief Financial Officer | ||
Wang Yilin | Hou Qijun | Chai Shouping |
24
5. Consolidated Cash Flow Statement (Continued)
Nine months ended September 30 | ||||||||
2019 | 2018 | |||||||
Items | RMB million | RMB million | ||||||
Cash flows from financing activities | ||||||||
Cash received from capital contributions | 500 | 877 | ||||||
Including: Cash received fromnon-controlling interests’ capital contributions to subsidiaries | 500 | 877 | ||||||
Cash received from borrowings | 656,378 | 584,649 | ||||||
Cash received relating to other financing activities | — | 58 | ||||||
|
|
|
| |||||
Sub-total of cash inflows | 656,878 | 585,584 | ||||||
|
|
|
| |||||
Cash repayments of borrowings | (611,154 | ) | (625,335 | ) | ||||
Cash payments for interest expenses and distribution of dividends or profits | (42,264 | ) | (36,910 | ) | ||||
Including: Subsidiaries’ cash payments for distribution of dividends or profits tonon-controlling interests | (11,533 | ) | (6,872 | ) | ||||
Capital reduction of subsidiaries | (48 | ) | (86 | ) | ||||
Cash payments relating to other financing activities | (12,563 | ) | — | |||||
|
|
|
| |||||
Sub-total of cash outflows | (666,029 | ) | (662,331 | ) | ||||
|
|
|
| |||||
Net cash flows used for financing activities | (9,151 | ) | (76,747 | ) | ||||
|
|
|
| |||||
Effect of foreign exchange rate changes on cash and cash equivalents | 2,761 | 3,202 | ||||||
Net increase in cash and cash equivalents | 25,615 | 31,733 | ||||||
Add: Cash and cash equivalents at beginning of the period | 85,954 | 123,700 | ||||||
|
|
|
| |||||
Cash and cash equivalents at end of the period | 111,569 | 155,433 | ||||||
|
|
|
|
/s/ Wang Yilin Chairman | /s/ Hou Qijun Director and President | /s/ Chai Shouping Chief Financial Officer | ||
Wang Yilin | Hou Qijun | Chai Shouping |
25
6. Company Cash Flow Statement
Nine months ended September 30 | ||||||||
2019 | 2018 | |||||||
Items | RMB million | RMB million | ||||||
Cash flows from operating activities | ||||||||
Cash received from sales of goods and rendering of services | 1,157,653 | 1,155,062 | ||||||
Refund of taxes | 1,819 | 3,282 | ||||||
Cash received relating to other operating activities | 31,937 | 27,271 | ||||||
|
|
|
| |||||
Sub-total of cash inflows | 1,191,409 | 1,185,615 | ||||||
|
|
|
| |||||
Cash paid for goods and services | (746,967 | ) | (726,504 | ) | ||||
Cash paid to and on behalf of employees | (69,139 | ) | (58,759 | ) | ||||
Payments of various taxes | (201,505 | ) | (208,555 | ) | ||||
Cash paid relating to other operating activities | (20,038 | ) | (19,769 | ) | ||||
|
|
|
| |||||
Sub-total of cash outflows | (1,037,649 | ) | (1,013,587 | ) | ||||
|
|
|
| |||||
Net cash flows from operating activities | 153,760 | 172,028 | ||||||
|
|
|
| |||||
Cash flows from investing activities | ||||||||
Cash received from disposal of investments | 7,902 | 30,256 | ||||||
Cash received from returns on investments | 20,480 | 26,480 | ||||||
Net cash received from disposal of fixed assets, oil and gas properties, intangible assets and other long-term assets | 490 | 292 | ||||||
|
|
|
| |||||
Sub-total of cash inflows | 28,872 | 57,028 | ||||||
|
|
|
| |||||
Cash paid to acquire fixed assets, oil and gas properties, intangible assets and other long-term assets | (135,117 | ) | (108,863 | ) | ||||
Cash paid to acquire investments | (14,659 | ) | (29,551 | ) | ||||
|
|
|
| |||||
Sub-total of cash outflows | (149,776 | ) | (138,414 | ) | ||||
|
|
|
| |||||
Net cash flows used for investing activities | (120,904 | ) | (81,386 | ) | ||||
|
|
|
|
/s/ Wang Yilin Chairman | /s/ Hou Qijun Director and President | /s/ Chai Shouping Chief Financial Officer | ||
Wang Yilin | Hou Qijun | Chai Shouping |
26
6. Company Cash Flow Statement (Continued)
Nine months ended September 30 | ||||||||
2019 | 2018 | |||||||
Items | RMB million | RMB million | ||||||
Cash flows from financing activities | ||||||||
Cash received from borrowings | 288,587 | 145,769 | ||||||
Cash received relating to other financing activities | — | 13 | ||||||
|
|
|
| |||||
Sub-total of cash inflows | 288,587 | 145,782 | ||||||
|
|
|
| |||||
Cash repayments of borrowings | (271,606 | ) | (175,581 | ) | ||||
Cash payments for interest expenses and distribution of dividends or profits | (26,023 | ) | (24,061 | ) | ||||
Cash payments relating to other financing activities | (6,620 | ) | — | |||||
|
|
|
| |||||
Sub-total of cash outflows | (304,249 | ) | (199,642 | ) | ||||
|
|
|
| |||||
Net cash flows used for financing activities | (15,662 | ) | (53,860 | ) | ||||
|
|
|
| |||||
Net increase in cash and cash equivalents | 17,194 | 36,782 | ||||||
Add: Cash and cash equivalents at beginning of the period | 13,109 | 44,432 | ||||||
|
|
|
| |||||
Cash and cash equivalents at end of the period | 30,303 | 81,214 | ||||||
|
|
|
|
/s/ Wang Yilin Chairman | /s/ Hou Qijun Director and President | /s/ Chai Shouping Chief Financial Officer | ||
Wang Yilin | Hou Qijun | Chai Shouping |
27
B. Financial statements for the third quarter of 2019 prepared in accordance with IFRS
1-1 Consolidated Statement of Comprehensive Income
Three months ended September 30 | ||||||||
2019 | 2018 | |||||||
RMB million | RMB million | |||||||
REVENUE | 618,143 | 607,080 | ||||||
OPERATING EXPENSES | ||||||||
Purchases, services and other | (424,124 | ) | (387,485 | ) | ||||
Employee compensation costs | (34,987 | ) | (34,223 | ) | ||||
Exploration expenses, including exploratory dry holes | (4,425 | ) | (5,258 | ) | ||||
Depreciation, depletion and amortisation | (56,374 | ) | (52,145 | ) | ||||
Selling, general and administrative expenses | (17,071 | ) | (18,874 | ) | ||||
Taxes other than income taxes | (57,923 | ) | (57,847 | ) | ||||
Other income/(expense) net | 1,481 | (6,469 | ) | |||||
|
|
|
| |||||
TOTAL OPERATING EXPENSES | (593,423 | ) | (562,301 | ) | ||||
|
|
|
| |||||
PROFIT FROM OPERATIONS | 24,720 | 44,779 | ||||||
|
|
|
| |||||
FINANCE COSTS | ||||||||
Exchange gain | 3,285 | 5,055 | ||||||
Exchange loss | (2,513 | ) | (4,720 | ) | ||||
Interest income | 928 | 1,041 | ||||||
Interest expense | (7,450 | ) | (5,670 | ) | ||||
|
|
|
| |||||
TOTAL NET FINANCE COSTS | (5,750 | ) | (4,294 | ) | ||||
|
|
|
| |||||
SHARE OF PROFIT OF ASSOCIATES AND JOINT VENTURES | 1,950 | 1,320 | ||||||
|
|
|
| |||||
PROFIT BEFORE INCOME TAX EXPENSE | 20,920 | 41,805 | ||||||
INCOME TAX EXPENSE | (6,583 | ) | (15,161 | ) | ||||
|
|
|
| |||||
PROFIT FOR THE PERIOD | 14,337 | 26,644 | ||||||
|
|
|
| |||||
OTHER COMPREHENSIVE INCOME | ||||||||
Item that will not be reclassified to profit or loss | ||||||||
Fair value changes in equity investment measured at fair value through other comprehensive income | (125 | ) | (12 | ) | ||||
Items that are or may be reclassified subsequently to profit or loss | ||||||||
Currency translation differences | 5,223 | 5,040 | ||||||
Share of the other comprehensive income of associates and joint ventures accounted for using the equity method | 100 | 489 | ||||||
|
|
|
| |||||
OTHER COMPREHENSIVE INCOME , NET OF TAX | 5,198 | 5,517 | ||||||
|
|
|
| |||||
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 19,535 | 32,161 | ||||||
|
|
|
| |||||
PROFIT FOR THE PERIOD ATTRIBUTABLE TO: | ||||||||
Owners of the Company | 8,830 | 21,220 | ||||||
Non-controlling interests | 5,507 | 5,424 | ||||||
|
|
|
| |||||
14,337 | 26,644 | |||||||
|
|
|
| |||||
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO: | ||||||||
Owners of the Company | 12,181 | 24,953 | ||||||
Non-controlling interests | 7,354 | 7,208 | ||||||
|
|
|
| |||||
19,535 | 32,161 | |||||||
|
|
|
| |||||
BASIC AND DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY (RMB) | 0.048 | 0.116 | ||||||
|
|
|
|
28
1-2 Consolidated Statement of Comprehensive Income
Nine months ended September 30 | ||||||||
2019 | 2018 | |||||||
RMB million | RMB million | |||||||
REVENUE | 1,814,402 | 1,726,717 | ||||||
|
|
|
| |||||
OPERATING EXPENSES | ||||||||
Purchases, services and other | (1,220,227 | ) | (1,113,547 | ) | ||||
Employee compensation costs | (100,015 | ) | (92,666 | ) | ||||
Exploration expenses, including exploratory dry holes | (16,692 | ) | (16,017 | ) | ||||
Depreciation, depletion and amortisation | (164,981 | ) | (166,724 | ) | ||||
Selling, general and administrative expenses | (49,766 | ) | (55,945 | ) | ||||
Taxes other than income taxes | (171,011 | ) | (163,750 | ) | ||||
Other income/(expense) net | 3,673 | (5,915 | ) | |||||
|
|
|
| |||||
TOTAL OPERATING EXPENSES | (1,719,019 | ) | (1,614,564 | ) | ||||
|
|
|
| |||||
PROFIT FROM OPERATIONS | 95,383 | 112,153 | ||||||
|
|
|
| |||||
FINANCE COSTS | ||||||||
Exchange gain | 8,192 | 13,455 | ||||||
Exchange loss | (7,710 | ) | (12,771 | ) | ||||
Interest income | 2,821 | 2,479 | ||||||
Interest expense | (22,647 | ) | (16,971 | ) | ||||
|
|
|
| |||||
TOTAL NET FINANCE COSTS | (19,344 | ) | (13,808 | ) | ||||
|
|
|
| |||||
SHARE OF PROFIT OF ASSOCIATES AND JOINT VENTURES | 6,657 | 5,144 | ||||||
|
|
|
| |||||
PROFIT BEFORE INCOME TAX EXPENSE | 82,696 | 103,489 | ||||||
INCOME TAX EXPENSE | (29,221 | ) | (38,228 | ) | ||||
|
|
|
| |||||
PROFIT FOR THE PERIOD | 53,475 | 65,261 | ||||||
|
|
|
| |||||
OTHER COMPREHENSIVE INCOME | ||||||||
Item that will not be reclassified to profit or loss | ||||||||
Fair value changes in equity investment measured at fair value through other comprehensive income | 70 | (134 | ) | |||||
Items that are or may be reclassified subsequently to profit or loss | ||||||||
Currency translation differences | 7,698 | 2,881 | ||||||
Share of the other comprehensive income of associates and joint ventures accounted for using the equity method | 437 | 485 | ||||||
|
|
|
| |||||
OTHER COMPREHENSIVE INCOME, NET OF TAX | 8,205 | 3,232 | ||||||
|
|
|
| |||||
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 61,680 | 68,493 | ||||||
|
|
|
| |||||
PROFIT FOR THE PERIOD ATTRIBUTABLE TO: | ||||||||
Owners of the Company | 37,253 | 48,661 | ||||||
Non-controlling interests | 16,222 | 16,600 | ||||||
|
|
|
| |||||
53,475 | 65,261 | |||||||
|
|
|
| |||||
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO: | ||||||||
Owners of the Company | 41,356 | 49,216 | ||||||
Non-controlling interests | 20,324 | 19,277 | ||||||
|
|
|
| |||||
61,680 | 68,493 | |||||||
|
|
|
| |||||
BASIC AND DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY (RMB) | 0.204 | 0.266 | ||||||
|
|
|
|
29
2. Consolidated Statement of Financial Position
September 30, 2019 | December 31, 2018 | |||||||
RMB million | RMB million | |||||||
NON-CURRENT ASSETS | ||||||||
Property, plant and equipment | 1,707,270 | 1,709,388 | ||||||
Investments in associates and joint ventures | 97,813 | 89,362 | ||||||
Equity investment measured at fair value through other comprehensive income | 846 | 738 | ||||||
Advance operating lease payments | — | 78,240 | ||||||
Right-of-use assets | 242,942 | — | ||||||
Intangible and othernon-current assets | 103,852 | 98,309 | ||||||
Deferred tax assets | 26,125 | 23,498 | ||||||
Time deposits with maturities over one year | 1,284 | 3,101 | ||||||
|
|
|
| |||||
TOTALNON-CURRENT ASSETS | 2,180,132 | 2,002,636 | ||||||
|
|
|
| |||||
CURRENT ASSETS | ||||||||
Inventories | 167,973 | 177,577 | ||||||
Accounts receivable | 77,689 | 59,522 | ||||||
Prepayment and other current assets | 117,878 | 89,345 | ||||||
Notes receivable | 9,558 | 16,308 | ||||||
Time deposits with maturities over three months but within one year | 36,123 | 9,535 | ||||||
Cash and cash equivalents | 111,569 | 85,954 | ||||||
|
|
|
| |||||
TOTAL CURRENT ASSETS | 520,790 | 438,241 | ||||||
|
|
|
| |||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | 336,914 | 299,848 | ||||||
Contract liabilities | 84,110 | 68,144 | ||||||
Income taxes payable | 14,508 | 5,728 | ||||||
Other taxes payable | 35,800 | 77,560 | ||||||
Short-term borrowings | 169,738 | 145,150 | ||||||
Lease liabilities | 7,432 | — | ||||||
|
|
|
| |||||
TOTAL CURRENT LIABILITIES | 648,502 | 596,430 | ||||||
|
|
|
| |||||
NET CURRENT LIABILITIES | (127,712 | ) | (158,189 | ) | ||||
|
|
|
| |||||
TOTAL ASSETS LESS CURRENT LIABILITIES | 2,052,420 | 1,844,447 | ||||||
|
|
|
| |||||
EQUITY | ||||||||
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY: | ||||||||
Share capital | 183,021 | 183,021 | ||||||
Retained earnings | 737,733 | 731,163 | ||||||
Reserves | 304,501 | 299,599 | ||||||
|
|
|
| |||||
TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY | 1,225,255 | 1,213,783 | ||||||
NON-CONTROLLING INTERESTS | 207,362 | 195,108 | ||||||
|
|
|
| |||||
TOTAL EQUITY | 1,432,617 | 1,408,891 | ||||||
|
|
|
| |||||
NON-CURRENT LIABILITIES | ||||||||
Long-term borrowings | 293,625 | 269,422 | ||||||
Asset retirement obligations | 138,560 | 132,780 | ||||||
Lease liabilities | 157,123 | — | ||||||
Deferred tax liabilities | 17,563 | 17,015 | ||||||
Other long-term obligations | 12,932 | 16,339 | ||||||
|
|
|
| |||||
TOTAL NON-CURRENT LIABILITIES | 619,803 | 435,556 | ||||||
|
|
|
| |||||
TOTAL EQUITY AND NON-CURRENT LIABILITIES | 2,052,420 | 1,844,447 | ||||||
|
|
|
|
30
3. Consolidated Statement of Cash Flows
Nine months ended September 30 | ||||||||
2019 | 2018 | |||||||
RMB million | RMB million | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Profit for the period | 53,475 | 65,261 | ||||||
Adjustments for: | ||||||||
Income tax expense | 29,221 | 38,228 | ||||||
Depreciation, depletion and amortisation | 164,981 | 166,724 | ||||||
Capitalised exploratory costs charged to expense | 6,107 | 8,167 | ||||||
Safety fund reserve | 2,846 | 2,870 | ||||||
Share of profit of associates and joint ventures | (6,657 | ) | (5,144 | ) | ||||
Reversal of provision for impairment of receivables, net | (732 | ) | (12 | ) | ||||
Write down in inventories, net | 777 | 115 | ||||||
Loss on disposal of property, plant and equipment | 3,137 | 7,146 | ||||||
Gain on disposal of othernon-current assets | (422 | ) | (141 | ) | ||||
Dividend income | (46 | ) | (640 | ) | ||||
Interest income | (2,821 | ) | (2,479 | ) | ||||
Interest expense | 22,647 | 16,971 | ||||||
Changes in working capital: | ||||||||
Accounts receivable, prepayments and other current assets | (37,455 | ) | (54,628 | ) | ||||
Inventories | 8,782 | (34,409 | ) | |||||
Accounts payable and accrued liabilities | 9,521 | 73,551 | ||||||
Contract liabilities | 15,966 | 11,878 | ||||||
|
|
|
| |||||
CASH FLOWS GENERATED FROM OPERATIONS | 269,327 | 293,458 | ||||||
Income taxes paid | (29,931 | ) | (34,404 | ) | ||||
|
|
|
| |||||
NET CASH FLOWS FROM OPERATING ACTIVITIES | 239,396 | 259,054 | ||||||
|
|
|
|
31
3. Consolidated Statement of Cash Flows (Continued)
Nine months ended September 30 | ||||||||
2019 | 2018 | |||||||
RMB million | RMB million | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Capital expenditures | (174,364 | ) | (148,119 | ) | ||||
Acquisition of investments in associates and joint ventures | (1,201 | ) | (630 | ) | ||||
Prepayments on long-term operating leases | (3,330 | ) | (3,116 | ) | ||||
Acquisition of intangible assets and othernon-current assets | (9,425 | ) | (4,841 | ) | ||||
Proceeds from disposal of property, plant and equipment | 472 | 256 | ||||||
Acquisition of subsidiaries | (57 | ) | — | |||||
Proceeds from disposal of othernon-current assets | 190 | 137 | ||||||
Interest received | 2,277 | 1,999 | ||||||
Dividends received | 2,818 | 2,581 | ||||||
Increase in time deposits with maturities over three months | (24,771 | ) | (2,043 | ) | ||||
|
|
|
| |||||
NET CASH FLOWS USED FOR INVESTING ACTIVITIES | (207,391 | ) | (153,776 | ) | ||||
|
|
|
| |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Repayments of short-term borrowings | (463,182 | ) | (484,332 | ) | ||||
Repayments of long-term borrowings | (147,972 | ) | (141,003 | ) | ||||
Lease liabilities paid | (11,565 | ) | — | |||||
Interest paid | (13,130 | ) | (14,863 | ) | ||||
Dividends paid tonon-controlling interests | (11,533 | ) | (6,872 | ) | ||||
Dividends paid to owners of the Company | (17,601 | ) | (15,175 | ) | ||||
Purchase ofnon-controlling interests | (998 | ) | — | |||||
Increase in short-term borrowings | 491,381 | 480,786 | ||||||
Increase in long-term borrowings | 164,997 | 103,863 | ||||||
Capital contribution fromnon-controlling interests | 500 | 877 | ||||||
Capital reduction of subsidiaries | (48 | ) | (86 | ) | ||||
Increase in other long-term obligations | — | 58 | ||||||
|
|
|
| |||||
NET CASH FLOWS USED FOR FINANCING ACTIVITIES | (9,151 | ) | (76,747 | ) | ||||
|
|
|
| |||||
TRANSLATION OF FOREIGN CURRENCY | 2,761 | 3,202 | ||||||
|
|
|
| |||||
Increase in cash and cash equivalents | 25,615 | 31,733 | ||||||
Cash and cash equivalents at beginning of the period | 85,954 | 123,700 | ||||||
|
|
|
| |||||
Cash and cash equivalents at end of the period | 111,569 | 155,433 | ||||||
|
|
|
|
32
4. Segment Information
Nine months ended September 30 | ||||||||
2019 | 2018 | |||||||
RMB million | RMB million | |||||||
Revenue | ||||||||
Exploration and Production | ||||||||
Intersegment sales | 399,429 | 388,257 | ||||||
Revenue from external customers | 90,047 | 84,869 | ||||||
|
|
|
| |||||
489,476 | 473,126 | |||||||
Refining and Chemicals | ||||||||
Intersegment sales | 527,464 | 517,924 | ||||||
Revenue from external customers | 139,564 | 147,597 | ||||||
|
|
|
| |||||
667,028 | 665,521 | |||||||
Marketing | ||||||||
Intersegment sales | 234,349 | 196,830 | ||||||
Revenue from external customers | 1,338,357 | 1,268,196 | ||||||
|
|
|
| |||||
1,572,706 | 1,465,026 | |||||||
Natural Gas and Pipeline | ||||||||
Intersegment sales | 31,957 | 24,634 | ||||||
Revenue from external customers | 245,254 | 225,396 | ||||||
|
|
|
| |||||
277,211 | 250,030 | |||||||
Head Office and Other | ||||||||
Intersegment sales | 200 | 134 | ||||||
Revenue from external customers | 1,180 | 659 | ||||||
|
|
|
| |||||
1,380 | 793 | |||||||
Total revenue from external customers | 1,814,402 | 1,726,717 | ||||||
|
|
|
| |||||
Profit/(loss) from operations | ||||||||
Exploration and Production | 76,935 | 57,884 | ||||||
Refining and Chemicals | 7,133 | 38,906 | ||||||
Marketing | 422 | 6,424 | ||||||
Natural Gas and Pipeline | 21,950 | 19,719 | ||||||
Head Office and Other | (11,057 | ) | (10,780 | ) | ||||
|
|
|
| |||||
95,383 | 112,153 | |||||||
|
|
|
|
33