| 5 | Segment information |
The Group manages its business by divisions, which are organized by business lines. In view of the fact that the Company and its subsidiaries operate mainly in the PRC, no geographical segment information is presented.
In a manner consistent with the way in which information is reported internally to the Group’s chief operating decision maker, Board of Directors, for the purposes of resource allocation and performance assessment, the Group has identified the following five reportable segments. No operating segments have been aggregated to form the following reportable segments.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise investments accounted for using the equity method, deferred income tax assets, cash and cash equivalents,time deposits,entrusted lending and incomes relating to these assets (such as share of profit of investments accounted for using equity method and interest income) and borrowings and interest expenses.
The Group principally operates in five operating segments: synthetic fibres, resins and plastics, intermediate petrochemicals, petroleum products and trading of petrochemical products. Synthetic fibres, resins and plastics, intermediate petrochemicals and petroleum products are produced through intermediate steps from the principal raw material of crude oil. The specific products of each segment are as follows:
| (i) | The synthetic fibres segment produces primarily polyester, acrylic fibres and carbon fibres, which are mainly used in the textile and apparel industries. |
| (ii) | The resins and plastics segment produces primarily polyester chips, polyethylene resins, polypropylene resins and PVA granules. The polyester chips are used to produce polyester fibres, coating and containers. Polyethylene resins and plastics are used to produce insulated cable, mulching films and moulded products such as housewares and toys. Polypropylene resins are used for films, sheets and moulded products such as housewares, toys, consumer electronics and automobile parts. |
| (iii) | The intermediate petrochemicals segment primarily produces p-xylene, benzene and ethylene oxide. The intermediate petrochemicals produced by the Group are both served as raw materials in the production of other petrochemicals, resins, plastics and synthetic fibres, and sold to external customers. |
| (iv) | The petroleum products segment is equipped with crude oil refinery facilities used to produce qualified refined gasoline, fuel, diesel oil, heavy oil and liquefied petroleum gas, and provide raw materials for the Group’s downstream petrochemical processing facilities. |
| (v) | The trading of petrochemical products segment is primarily engaged in importing and exporting of petrochemical products. The products are sourced from international and domestic suppliers. |
| (vi) | Other operating segments represent the operating segments which do not meet the quantitative threshold for determining reportable segments. These include investment property leasing, service provision and a variety of other commercial activities. |
| 2015 | 2016 | 2017 | ||||||||||||||||||||||||||||||||||
| Total segment revenue |
Inter- segment revenue |
Revenue from external customers |
Total segment revenue |
Inter- segment revenue |
Revenue from external customers |
Total segment revenue |
Inter- segment revenue |
Revenue from external customers |
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| RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | ||||||||||||||||||||||||||||
| Synthetic fibres |
2,397,015 | — | 2,397,015 | 1,915,242 | — | 1,915,242 | 2,061,765 | — | 2,061,765 | |||||||||||||||||||||||||||
| Resins and plastics |
10,348,002 | 106,042 | 10,241,960 | 10,164,433 | 91,673 | 10,072,760 | 10,596,844 | 123,824 | 10,473,020 | |||||||||||||||||||||||||||
| Intermediate petrochemicals |
23,305,685 | 13,697,886 | 9,607,799 | 20,360,722 | 11,248,718 | 9,112,004 | 23,302,939 | 12,949,321 | 10,353,618 | |||||||||||||||||||||||||||
| Petroleum products |
47,473,490 | 3,579,131 | 43,894,359 | 38,776,209 | 3,514,487 | 35,261,722 | 53,259,378 | 8,737,935 | 44,521,443 | |||||||||||||||||||||||||||
| Trading of petrochemical products |
16,940,621 | 3,220,905 | 13,719,716 | 22,148,401 | 1,551,453 | 20,596,948 | 24,953,285 | 1,240,250 | 23,713,035 | |||||||||||||||||||||||||||
| Others |
1,429,317 | 542,028 | 887,289 | 1,369,671 | 485,441 | 884,230 | 1,364,977 | 525,443 | 839,534 | |||||||||||||||||||||||||||
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| 101,894,130 | 21,145,992 | 80,748,138 | 94,734,678 | 16,891,772 | 77,842,906 | 115,539,188 | 23,576,773 | 91,962,415 | ||||||||||||||||||||||||||||
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| 2015 | 2016 | 2017 | ||||||||||
| RMB’000 | RMB’000 | RMB’000 | ||||||||||
| Segment result - Profit/(loss) from operations |
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| Petroleum products |
1,862,304 | 3,812,973 | 3,120,024 | |||||||||
| Resins and plastics |
1,218,598 | 1,637,578 | 1,355,908 | |||||||||
| Intermediate petrochemicals |
956,820 | 1,810,011 | 2,206,128 | |||||||||
| Trading of petrochemical products |
15,165 | 51,168 | 60,583 | |||||||||
| Synthetic fibres |
(356,399 | ) | (608,891 | ) | (475,266 | ) | ||||||
| Others |
212,444 | 75,017 | 134,496 | |||||||||
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| Profit from operations |
3,908,932 | 6,777,856 | 6,401,873 | |||||||||
| Net finance (expenses)/income |
(243,779 | ) | 83,685 | 207,332 | ||||||||
| Share of profit of investments accounted for using the equity method |
572,035 | 916,754 | 1,243,693 | |||||||||
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| Profit before taxation |
4,237,188 | 7,778,295 | 7,852,898 | |||||||||
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| Other profit and loss disclosures |
| 2015 | 2016 | 2017 | ||||||||||||||||||||||||||||||||||
| Depreciation and amortisation |
Impairment loss |
Inventory write down |
Depreciation and amortisation |
Impairment loss |
Inventory write down |
Depreciation and amortisation |
Impairment loss |
Inventory (write-down) /reversal |
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| RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | ||||||||||||||||||||||||||||
| Synthetic fibres |
(159,472 | ) | — | (4,768 | ) | (137,153 | ) | (185,096 | ) | (38,750 | ) | (79,658 | ) | (49,107 | ) | (38,287 | ) | |||||||||||||||||||
| Resins and plastics |
(122,558 | ) | — | (339 | ) | (120,641 | ) | — | 1,575 | (163,618 | ) | (9 | ) | (5,177 | ) | |||||||||||||||||||||
| Intermediate petrochemicals |
(552,833 | ) | (50,001 | ) | (429 | ) | (525,698 | ) | (14,351 | ) | (642 | ) | (538,435 | ) | (50,210 | ) | (4,487 | ) | ||||||||||||||||||
| Petroleum products |
(979,911 | ) | — | (3,168 | ) | (886,784 | ) | (53,155 | ) | — | (922,670 | ) | (44 | ) | (12,399 | ) | ||||||||||||||||||||
| Trading of petrochemical products |
(175 | ) | — | (13,150 | ) | (176 | ) | — | — | (171 | ) | — | — | |||||||||||||||||||||||
| Others |
(230,012 | ) | (756 | ) | (23,014 | ) | (211,808 | ) | (1,570 | ) | (38,451 | ) | (129,577 | ) | (18,875 | ) | (111 | ) | ||||||||||||||||||
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| (2,044,961 | ) | (50,757 | ) | (44,868 | ) | (1,882,260 | ) | (254,172 | ) | (76,268 | ) | (1,834,129 | ) | (118,245 | ) | (60,461 | ) | |||||||||||||||||||
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| As at 31 December | ||||||||
| 2016 | 2017 | |||||||
| Total assets | Total assets | |||||||
| RMB’000 | RMB’000 | |||||||
| Allocated assets |
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| Synthetic fibres |
1,405,804 | 1,101,836 | ||||||
| Resins and plastics |
1,821,576 | 2,184,706 | ||||||
| Intermediate petrochemicals |
4,441,418 | 5,122,226 | ||||||
| Petroleum products |
13,426,863 | 13,792,883 | ||||||
| Trading of petrochemical products |
1,186,590 | 1,229,927 | ||||||
| Others |
2,323,376 | 1,883,275 | ||||||
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| Allocated assets |
24,605,627 | 25,314,853 | ||||||
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| Unallocated assets |
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| Investments accounted for using the equity method |
3,688,794 | 4,452,044 | ||||||
| Cash and cash equivalents |
5,440,623 | 7,504,266 | ||||||
| Time deposits with financial institutions |
— | 2,000,000 | ||||||
| Deferred income tax assets |
103,091 | 119,307 | ||||||
| Others |
107,475 | 52,993 | ||||||
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| Unallocated assets |
9,339,983 | 14,128,610 | ||||||
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| Total assets |
33,945,610 | 39,443,463 | ||||||
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| As at 31 December | ||||||||
| 2016 | 2017 | |||||||
| Total liabilities | Total liabilities | |||||||
| RMB’000 | RMB’000 | |||||||
| Allocated liabilities |
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| Synthetic fibres |
344,287 | 461,706 | ||||||
| Resins and plastics |
1,118,166 | 1,209,940 | ||||||
| Intermediate petrochemicals |
1,126,031 | 1,330,601 | ||||||
| Petroleum products |
4,323,580 | 5,718,117 | ||||||
| Trading of petrochemical products |
1,407,484 | 1,521,818 | ||||||
| Others |
76,395 | 79,584 | ||||||
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| Allocated liabilities |
8,395,943 | 10,321,766 | ||||||
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| Unallocated liabilities |
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| Borrowings |
546,432 | 606,157 | ||||||
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| Unallocated liabilities |
546,432 | 606,157 | ||||||
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| Total liabilities |
8,942,375 | 10,927,923 | ||||||
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| 2015 | 2016 | 2017 | ||||||||||
| RMB’000 | RMB’000 | RMB’000 | ||||||||||
| Additions to property, plant and equipment, construction in progress, lease prepayments and other assets |
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| Synthetic fibres |
38,629 | 106,872 | 130,908 | |||||||||
| Resins and plastics |
94,935 | 169,330 | 156,189 | |||||||||
| Intermediate petrochemicals |
180,806 | 261,291 | 525,828 | |||||||||
| Petroleum products |
546,996 | 740,520 | 1,076,212 | |||||||||
| Others |
96,886 | 36,965 | 20,738 | |||||||||
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| 958,252 | 1,314,978 | 1,909,875 | ||||||||||
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| Entity-wide information |
The Group’s revenue from external customers are mainly within Mainland China in 2017, 2016 and 2015.
As at 31 December 2017 and 31 December 2016, assets other than financial instruments are mainly within Mainland China.
Revenue of approximate RMB 39,804,025 thousands (2016: RMB 31,796,065 thousands, 2015: RMB 39,657,297 thousands) are derived from a single customer. These revenues are attributable to the Petroleum products and Others segments.