中石化油服(01033) - 2019 - 中期财报

Glossary This section provides definitions for key terms and abbreviations used throughout the report Company Profile and Key Financial Indicators This section provides an overview of the company and its key financial performance metrics Key Accounting Data and Financial Indicators The company achieved robust performance in H1 2019, with significant growth in revenue and net profit under both CASBE and IFRS Key Accounting Data (Under CASBE) | Indicator | Current Period (RMB Thousand) | Prior Period (RMB Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 30,256,030 | 23,650,777 | 27.9 | | Net Profit Attributable to Parent | 509,428 | 400,949 | 27.1 | | Net Profit Attributable to Parent After Deducting Non-recurring Gains and Losses | 430,060 | 463 | 92,785.5 | | Net Cash Flow from Operating Activities | -709,159 | -3,515,042 | N/A | | Total Assets (Period-end) | 66,064,838 | - | 8.5 (vs. end of prior year) | | Net Assets Attributable to Parent (Period-end) | 6,584,854 | - | 14.0 (vs. end of prior year) | Key Financial Indicators (Under CASBE) | Indicator | Current Period | Prior Period | Change | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 0.027 | 0.022 | 22.7% | | Weighted Average Return on Net Assets | 8.44% | 8.99% | Decreased by 0.55 percentage points | | Weighted Average Return on Net Assets After Deducting Non-recurring Gains and Losses | 7.13% | 0.01% | Increased by 7.12 percentage points | Key Accounting Data (Under IFRS) | Indicator | Current Period (RMB Thousand) | Prior Period (RMB Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit Attributable to Equity Holders | 803,913 | 615,731 | 30.6 | | Basic and Diluted Earnings Per Share (RMB) | 0.042 | 0.034 | 23.5 | | Return on Equity | 12.21% | 10.01% | Increased by 2.2 percentage points | Non-recurring Gains and Losses Items (RMB Thousand) | Item | Amount | | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | -1,437 | | Government Grants Recognized in Current Profit or Loss | 21,728 | | Gains/Losses from Debt Restructuring | 75,509 | | Other Non-operating Income and Expenses | 6,223 | | Income Tax Impact | -22,655 | | Total | 79,368 | Company Business Overview This section outlines the company's principal business, operating model, core competencies, and significant asset changes Principal Business, Business Model, and Core Competencies The company is a large integrated oil and gas engineering and technical services provider, offering full-lifecycle services from exploration to well abandonment across five major segments, underpinned by integrated capabilities and advanced technology - The company's business covers five major segments: geophysical, drilling engineering, logging and testing, downhole special operations, and engineering construction, spanning the entire oil and gas exploration and development value chain[23] - The company operates in over 20 provinces in China and 35 countries and regions overseas[23] Core Equipment and Team Strength (As of June 30, 2019) | Asset Category | Quantity | | :--- | :--- | | Land Drilling Rigs | 716 units | | Offshore Drilling Platforms | 14 platforms | | Seismograph Main Units | 64 units | | Imaging Logging Systems | 131 sets | | 2500/3000 Type Fracturing Trucks | 134 units | | Professional Teams | 1,799 teams | Significant Changes in Major Assets As of June 30, 2019, total assets increased by 8.5% to RMB 66.06 billion due to higher workload and new lease standard adoption, while net assets attributable to parent rose 14.0% Asset and Liability Status (As of June 30, 2019) | Indicator | Amount (RMB Thousand) | Change vs. Prior Year-End (%) | | :--- | :--- | :--- | | Total Assets | 66,064,838 | 8.5% | | Net Assets Attributable to Parent | 6,584,854 | 14.0% | | Asset-Liability Ratio | 90.0% | -0.5 percentage points | - The increase in total assets was primarily due to higher workload leading to increased contract assets and the recognition of right-of-use assets under the new lease standard[24] Discussion and Analysis of Operations This section provides a detailed review of the company's operating performance, market outlook, and risk factors Operating Performance Review and Analysis In H1 2019, the oilfield services industry improved due to increased upstream capex, leading to a 27.9% revenue growth and a 3.3 percentage point increase in gross profit margin for the company H1 2019 Overall Performance | Indicator | Amount (RMB Thousand) | YoY Growth (%) | | :--- | :--- | :--- | | Operating Revenue | 30,256,030 | 27.9% | | Net Profit Attributable to Parent | 509,428 | 27.1% | | Basic Earnings Per Share (RMB) | 0.027 | 22.7% | - The gross profit margin for principal activities in H1 was 9.2%, an increase of 3.3 percentage points year-on-year, primarily due to deepened reforms, strengthened management, and internal efficiency improvements[27] H1 2019 New Contract Value | Market | New Contract Value | YoY Growth (%) | | :--- | :--- | :--- | | Total | RMB 42.85 billion | 24.6% | | Sinopec Market | RMB 22.98 billion | 42.7% | | Domestic External Market | RMB 7.94 billion | 9.2% | | Overseas Market | USD 1.72 billion | -2.0% | Review of Business Segments In H1 2019, drilling, logging and testing, downhole special operations, and engineering construction services all achieved double-digit revenue growth, while geophysical services declined H1 2019 Principal Business Segment Performance (RMB Thousand) | Business Segment | Revenue from Principal Activities | YoY Change (%) | Gross Profit Margin (%) | Change in Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | Geophysical | 1,869,906 | -26.7% | 5.0% | Decreased by 0.6 percentage points | | Drilling | 16,779,456 | 35.8% | 10.0% | Increased by 4.3 percentage points | | Logging and Testing | 1,048,528 | 51.8% | 20.7% | Increased by 18.1 percentage points | | Downhole Special Operations | 3,197,268 | 56.7% | 7.8% | Increased by 3.1 percentage points | | Engineering Construction | 6,481,250 | 23.3% | 8.2% | Increased by 0.3 percentage points | | Total | 30,009,996 | 28.7% | 9.2% | Increased by 3.3 percentage points | - International business revenue was RMB 6.01 billion, a 2.1% year-on-year decrease, accounting for 20.0% of principal business revenue, with 32 new/renewed drilling rigs signed in Saudi Arabia totaling USD 1.06 billion in contract value[35] Analysis of Assets and Liabilities As of the reporting period end, total assets grew 8.5% from the beginning of the year, driven by a 56.5% increase in contract assets and a 99.9% rise in construction in progress Major Asset and Liability Item Changes (vs. Beginning of Year) | Item | Change (%) | Primary Reason | | :--- | :--- | :--- | | Contract Assets | 56.5% | Increased workload in H1 led to higher utilization | | Construction in Progress | 99.9% | Due to investment in geophysical acquisition and construction equipment | | Non-current Liabilities Due Within One Year | 330.3% | Due to reclassification of some long-term borrowings | | Special Reserves | 98.0% | Due to increased provision for special reserves | Second Half Market Outlook and Work Plan The company anticipates continued oilfield services recovery in H2 2019, with oil prices between USD 60-70/barrel, and plans to secure over RMB 25 billion in new contracts - International oil prices are expected to fluctuate between USD 60-70/barrel in H2, with major domestic oil companies continuing to increase upstream exploration and development capital expenditure[48] - H2 operating plan targets new contract value of over RMB 25 billion and completed contract value of over RMB 34 billion[49] - Planned H2 capital expenditure is RMB 2.01 billion, primarily for urgent production needs, technical service capability enhancement, and equipment upgrades[58] - The company will continue to deepen internal reforms, streamline organizational structure, optimize team composition, and strengthen project management-centric refined management[57] Risk Warnings The company faces key risks including oil price volatility, intense market competition, environmental and safety hazards, geopolitical and policy risks in overseas operations, and exchange rate fluctuations - Key risk factors include: - Oil Price Uncertainty: Global trade frictions and geopolitical conflicts increase oil price volatility - Market Competition Risk: The oversupply in the oilfield services industry has not fundamentally improved, leading to intense competition - Environmental and Safety Risk: Oilfield service operations may result in casualties, property damage, and environmental harm - Overseas Operation Risk: Facing multiple geopolitical, economic, legal, and tax risks in international operations - Exchange Rate Risk: International business is primarily settled in USD, making the company susceptible to RMB exchange rate fluctuations[60][61][62][63][64] Significant Matters This section details significant corporate events, including profit distribution, litigation, related party transactions, and accounting policy changes Profit Distribution and Commitment Fulfillment The Board resolved not to distribute H1 2019 cash dividends or capitalize capital reserves, while the controlling shareholder strictly fulfilled its commitments regarding competition and related party transactions - The Board resolved not to distribute H1 2019 dividends or proceed with capital reserve capitalization[71] - Controlling shareholder Sinopec Group continued to fulfill its long-term commitments made during the major asset restructuring regarding avoidance of horizontal competition, regulation of related party transactions, and maintaining the listed company's independence[72][73] Significant Litigation and Equity Incentive During the reporting period, the judicial reorganization plan for the company's indirectly controlled Brazilian subsidiary was approved, and 14.715 million A-share stock options were cancelled due to unfulfilled exercise conditions - The judicial reorganization plan for the company's indirectly controlled Brazilian subsidiary was approved by the Rio de Janeiro court in Brazil on July 15, 2019[76] - Due to unfulfilled exercise conditions for the first exercise period, the company cancelled 14.715 million A-share stock options; an additional 2.163 million options were cancelled due to changes in incentive recipients[82] Significant Related Party Transactions The company's significant related party transactions primarily involve the controlling shareholder Sinopec Group and its affiliates, covering procurement, engineering services, community services, and financing, all conducted at market prices H1 2019 Major Ordinary Related Party Transactions (RMB Thousand) | Related Party Transaction Content | Related Party | Transaction Amount | | :--- | :--- | :--- | | Procurement of Raw Materials and Equipment | Sinopec Group and its Affiliates | 4,519,246 | | Provision of Engineering Services | Sinopec Group and its Affiliates | 18,199,681 | | Obtaining Loans | Sinopec Group and its Affiliates | 16,917,831 | | Repayment of Loans | Sinopec Group and its Affiliates | 15,224,918 | | Interest Expense | Sinopec Group and its Affiliates | 384,288 | Changes in Accounting Policies Effective January 1, 2019, the company adopted the revised CASBE No. 21 – Leases, requiring lessees to recognize right-of-use assets and lease liabilities for most leases, with retrospective adjustments to opening financial statements - Effective January 1, 2019, the company adopted the new lease standard, eliminating the distinction between finance and operating leases for lessees, requiring recognition of right-of-use assets and lease liabilities for all leases (except short-term and low-value asset leases)[93] Impact of New Lease Standard on Book Amounts as of January 1, 2019 (RMB Thousand) | Financial Statement Item | Adjustment Amount | | :--- | :--- | | Fixed Assets | -71,599 | | Right-of-Use Assets | +1,020,627 | | Intangible Assets | -4,549 | | Non-current Liabilities Due Within One Year | +310,302 | | Lease Liabilities | +663,295 | Share Changes and Shareholder Information This section provides details on the company's share capital structure and major shareholders Shareholder Information As of June 30, 2019, the company's total share capital structure remained unchanged with 143,985 shareholders, and controlling shareholder Sinopec Group held a combined 70.18% stake - As of June 30, 2019, the total number of shareholders was 143,985, comprising 143,643 A-share holders and 342 H-share registered holders[97] - Controlling shareholder Sinopec Group directly holds 56.51% of the company's A-shares and indirectly holds 13.67% of H-shares through its wholly-owned subsidiary, totaling a 70.18% stake[100][103] Top Ten Shareholders' Shareholding (As of June 30, 2019) | Shareholder Name | Number of Shares Held | Shareholding Percentage (%) | | :--- | :--- | :--- | | Sinopec Group | 10,727,896,364 | 56.51 | | HKSCC Nominees Limited | 5,402,118,744 | 28.46 | | CITIC Limited | 1,035,000,000 | 5.45 | | Dirui Asset Management (Hangzhou) Co., Ltd. | 133,333,333 | 0.70 | | Donghai Fund - Industrial Bank - Huaxin Trust - Huizhi Investment No. 49 | 66,666,666 | 0.35 | | Donghai Fund - Industrial Bank - Huaxin Trust - Huizhi Investment No. 47 | 66,666,666 | 0.35 | Information on Directors, Supervisors, and Senior Management This section provides details on the shareholding, incentives, and changes in the company's directors, supervisors, and senior management Shareholding and Incentive Status of Directors, Supervisors, and Senior Management As of the reporting period end, the company's directors, supervisors, and senior management did not directly hold shares, though some senior management held stock options, and some personnel indirectly held shares through the 'Cohesive Win-Win Plan' - As of the end of the reporting period, all current and departed directors, supervisors, and senior management did not directly hold company shares[107] - Some senior executives collectively held 763,000 unexercised stock options[109] - 10 directors, supervisors, and senior management indirectly held company shares by subscribing to a total of 3.55 million units under the 'Cohesive Win-Win Plan'[110][111] Changes in Directors, Supervisors, and Senior Management Personnel During the reporting period, the company experienced several personnel changes among its directors, supervisors, and senior management, including the election of Mr. Chen Xikun as Vice Chairman and Mr. Yuan Jianqiang as General Manager and Director - Significant personnel changes include: - Mr. Chen Xikun: Elected as Vice Chairman of the company - Mr. Yuan Jianqiang: Appointed as General Manager and elected as a Director - Mr. Sun Qingde: Relinquished his positions as Vice Chairman and General Manager due to job role changes[112] Financial Report This section presents the company's financial statements prepared under both China Accounting Standards for Business Enterprises and International Financial Reporting Standards Financial Report Prepared Under China Accounting Standards for Business Enterprises This part includes the unaudited H1 2019 consolidated and company financial statements prepared under CASBE, encompassing balance sheets, income statements, cash flow statements, and notes Financial Report Prepared Under International Financial Reporting Standards This part includes the H1 2019 condensed consolidated financial information prepared under IFRS and reviewed by Grant Thornton Hong Kong Limited, comprising statements of comprehensive income, financial position, changes in equity, cash flows, and notes Documents for Inspection This section lists documents available for inspection by shareholders and regulatory bodies at the company's office Directory of Documents for Inspection The report lists documents available at the company's office for shareholder and regulatory review, including the signed semi-annual report, financial reports, articles of association, and all publicly disclosed documents - Documents for inspection include: - Original semi-annual report signed by the Chairman - Semi-annual financial report signed and sealed by senior management - Articles of Association - Originals of all publicly disclosed documents and announcements during the reporting period[590]