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August 29, 2005 Hong Kong

China Petroleum & Chemical Corporation 1H 2005 Results Announcement. August 29, 2005 Hong Kong. Disclaimer.

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August 29, 2005 Hong Kong

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  1. China Petroleum & Chemical Corporation1H 2005 Results Announcement August 29, 2005 Hong Kong

  2. Disclaimer This presentation and the presentation materials distributed herewith include forward-looking statements. All statements, other than statements of historical facts, that address activities, events or developments that Sinopec Corp. expects or anticipates will or may occur in the future (including but not limited to projections, targets, estimates and business plans) are forward-looking statements. Sinopec Corp.'s actual results or developments may differ materially from those indicated by these forward-looking statements as a result of various factors and uncertainties, including but not limited to price fluctuations, actual demand, exchange rate fluctuations, exploration and development outcomes, estimates of proven reserves, competition, environmental risks, changes in legal, financial and regulatory frameworks, international economic and financial market conditions, political risks, project delay, project approval, cost estimates and other risks and factors beyond our control. In addition, Sinopec Corp. makes the forward-looking statements referred to herein as of today and undertakes no obligation to update these statements.

  3. Agenda • 1H 2005 Business Review • 1H 2005 Financial Performance • 2H 2005 Business Prospects

  4. 1H 2005 Business Review

  5. Market Environment • China’s economy maintained steady growth with GDP at 9.5% • Domestic consumption of oil products increased by 5.56% • Domestic consumption of petrochemicals (ethylene equivalent) increased by 5.70% • Crude oil price climbed to a record high • Petrochemical prices remained high albeit somewhat down from 4Q 2004 • Price control on refined oil products remained in effect

  6. Profit Continues to Grow EBIT Analysis Unit: RMB billion EBIT Total 33.682 Chemicals Profit Growth EBIT Total 28.562 Refining Profit Change Marketing Profit Change Corporate & Others E&P Profit Growth 1H 2004 1H 2005

  7. E&P – Stable Production 1H 05 1H 04 Change (%) 30 June 2005 31 Dec. 2004 Change (%)

  8. E&P Segment Performance Crude Oil and Natural Gas Realized Price EBIT of E&P Segment Natural Gas USD/mcf Crude Oil USD/bbl RMB million

  9. Refining– Efficient Operation at Full Utilization 1H 05 1H 04 Change (%)

  10. Refining Segment Performance Refining Margin / Cash Operating Cost EBIT of Refining Segment USD/bbl RMB million

  11. Marketing - Optimized Marketing Network, Expanded Retail and Distribution 1H 05 1H 04 Change (%)

  12. Marketing Segment Performance RON #90 Gasoline Guidance Price EBIT of Marketing Segment RMB/Tonne RMB million #0 Diesel Guidance Price RMB/Tonne 1H2004 1H2005 Marketing cash operating cost (RMB/tonne) 153.38 149.93

  13. Chemicals — Production Aligned with Market Demand 1H 05 1H 04 Change (%) Data above for 1H 2004 and 1H 2005 include production from the chemical assets acquired from Sinopec Group at the end of 2004. 100% production from YPC-BASF and Shanghai-Secco was calculated into the statistics in 2005.

  14. Chemicals Segment Performance EBIT of Chemicals Segment Chemicals Price Spread (1990 - Jul. 2005) RMB million USD/tonne 1H2004 1H2005 Ethylene cash operating cost (USD/tonne) 142.64 148.87

  15. Cost Reduction Total cost reduction reached RMB 1.282 billion in 1H 2005 RMB million 2,500 1,282

  16. Capital Expenditure 1H 2005 Capex: RMB22.55 bn • E & P –10.077 bn, focus on progressive exploration in the existing blocks and pre-exploration in new blocks • Refining – 3.451 bn, second phase of Ningbo-Shanghai-Nanjing pipeline is close to completion, and a number of revamping projects are progressing smoothly • Marketing – 6.384 bn, south-west oil pipeline at its final stage, construction and acquisition of petrol stations on schedule • Chemicals – 2.242 bn, a batch of key revamping projects, such as Maoming ethylene project and chemical fertilizer revamping projects, progressed smoothly 1H 2005 Capex Breakdown RMB billion 62.00 22.55 In addition, RMB1.854 bn invested in Shanghai-Secco and other JV projects

  17. 1H 2005 Financial Performance

  18. Significant Growth in Profit 1H 05 1H 04 Change (%)

  19. Financial Highlights As of 30 June 2005 As of 31 Dec. 2004 1H 05 1H 04

  20. Returns and Dividends ROCE Dividends RMB Yuan ROCE for 1H 2005 was not annualized

  21. 2H 2005 Business Prospects

  22. Market Environment in 2H 2005 • China’s economy is expected to maintain rapid growth • Demand for oil products and petrochemicals will increase steadily • Crude oil price will remain high and volatile • Global refining and chemical sectors should remain favorable • Appreciation of RMB will lower the purchasing cost of crude oil • Price control on refined oil products will remain effective

  23. E & P • Implement aggressive resource strategy, expedite exploration and development, pursue 100% reserve replacement • Build up production capacity in Tahe oilfields in western China and shallow water blocks of Shengli oilfields in eastern China • Expand natural gas market 2H Plan 1H Actual Change%

  24. Refining • Diversify crude resources to reduce purchasing cost • Take advantage of pipeline transportation and optimize resource allocation to reduce transportation cost • Adjust crude oil processing scheme and product mix to increase high value-added product volumes • Strengthen management and ensure safe, stable and efficient operation 2H Plan 1H Actual Change%

  25. Marketing • Conduct market analysis and expand sales volumes appropriately • Strengthen management of stations to increase retail and direct sales volumes • Fully leverage logistics network to optimize allocation of resources, to reduce cost • Expedite construction of pipelines and stations in strategic locations to further optimize network • Accelerate application of petrol IC cards to realize the target of “One Card, All Sinopec Stations” 2H Plan 1H Actual Change%

  26. Chemicals • Fully exploit newly added capacity and increase production of major chemical products • Implement market-oriented strategies and increase production of performance compound resins and differential fibers • Fully leverage newly established Chemical Sales Company and improve competitiveness 2H Plan 1H Actual Change%

  27. Conclusion • Continue to implement operating strategy of “Reform, Adjustment, Innovation, and Development” • Strive to achieve whole year operating targets • Maintain sound operating performance Achieve sustainable and efficient growth

  28. For Further Information http://www.sinopec.com Investor Relations Beijing: Tel: (8610) 64990060 Fax: (8610) 64990489 Email: ir@sinopec.com Hong Kong: Tel: (852) 28242638Fax: (852) 28243669 Email: ir@sinopechk.com New York: Tel: (212) 759 5085 Fax: (212) 759 6882 Email: fangzq@sinopecusa.com Media Relations Tel: (8610) 64990092 Fax: (8610) 64990093 Email: media@sinopec.com

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