China Petroleum & Chemical Corporation Class A · SSE:600028

China Petroleum & Chemical Corporation Class A — H1 2004 Earnings Presentation

31 slides from China Petroleum & Chemical Corporation Class A's earnings presentation, Aug 30, 2004

  1. Slide 1: 1H 2004 Results Announcement

    China Petroleum & Chemical Corporation 1H 2004 Results Announcement 30 August 2004 Hong Kong

  2. Slide 2: Disclaimer

    Disclaimer This presentation and the presentation materials distributed herewith include forwar d-looking statements. All statements, other than statements of historical facts, that addres s activities, events or developments that Sinopec Corp. expects or anticipates will or may occur in the future

  3. Slide 3: Agenda

    Agenda • Performance Highlights • 1H 2004 Performance Review • 2H 2004 Business Prospects 30 August 2004 3

  4. Slide 4: Performance Highlights

    Performance Highlights

  5. Slide 5: Profit Kept Growing - Asset Structure Further Optimized

    Profit Kept Growing - Asset Structure Further Optimized EBIT Analysis Unit: RMB million 5,850 233 2,324 412 27,339 Corporate 4,047 & Others Impairment Employee 1,620 Losses Reduction 18,569 222 on Fixed Expenses Chemicals Assets Profit Growth Marketing E&P Profit Refining Profit Growth Growth Profit

  6. Slide 6: Profit Kept Growing - Leveraging Integrated Business

    Profit Kept Growing - Leveraging Integrated Business EBIT Contribution by Segment (RMB million ） 30000 Unit: RMB million 1H 04 1H 03 Change (%) 25000 20000 Turnover and Other 275,442 205,335 34.14 Operating Revenues 15000 EBITDA 42,112 31,516 33.62 10000 EBIT 27,339 18,569 47.23 5000 Net Profit 16,1

  7. Slide 7: Financial Highlights

    Financial Highlights Unit: RMB million 1H 04 FY 03 Change (%) Short-term Debt 37,340 29,079 28.41 Long-term Debt 49,977 43,660 14.47 Shareholders’ Fund 178,409 167,899 6.26 Debt / Total Capital 26.56% 24.08% 248bps EBITDA Interest Coverage 21.2x 17.2x 4.0x Unit: RMB million 1H 04 Cash flow from Oper

  8. Slide 8: Returns and Dividend

    Returns and Dividend ROCE Improvement Dividend RMB Yuan 0.10 10% 9.04% 8% 0.08 7.08% 6.17% 6% 0.06 0.06 0.06 4% 0.04 2% 0.02 0.04 0.03 0.02 0% 0.00 2002 2003 1H 2004 2002 2003 2004 Half-year Dividend Year-end Dividend 30 August 2004 8

  9. Slide 9: As a Result of Good Market Environment

    As a Result of Good Market Environment Good market environment for Company’s earnings growth  Oil prices remained high and volatile  Refining margin improved and chemical businesses entered into upturn cycle  Macro economic control measures by the Chinese government have achi eved good results; C

  10. Slide 10: As a Result of Continuous Delivery of Corporate Strategies

    As a Result of Continuous Delivery of Corporate Strategies  Operation volumes expanded as demand grew – E & P: improved reserve profile and increased production capacity, maintained modest growth in crude and gas production – Refining and Chemicals: increased capacity and efficiency, improved produ

  11. Slide 11: Visions

    Visions  Corporate reform governs business activities to achieve effec tive growth  Continue to pursue a strategy founded on “resource and mar ket expansion; cost reduction and prudent investment”  Continue to rationalize assets portfolio  Enhance internal control procedures Realize Sustainable

  12. Slide 12: 1H 2004 Performance Review

    1H 2004 Performance Review

  13. Slide 13: E & P – Oil and Gas Production Continued to Grow

    E & P – Oil and Gas Production Contin ued to Grow 1H 04 1H 03 Change (%) Newly Added Proved Oil Reserves (mm bbls) 124.40 115.80 7.43 Newly Added Proved Gas Reserves (bcf) 872.74 276.80 215.30 Period-end Proved Oil & Gas Reserves (mm boe) 3,855 3,887 -0.82 Crude Oil Production (mm bbls) 135.85 133.7

  14. Slide 14: E&P – Segment Performance

    E&P – Segment Performance Crude Oil and Natural Gas EBIT of E&P Segment Realized Price Crude Oil Natural Gas RMB million USD/bbl USD/mcf 12,000 10,298 10,520 32 28.9 29.62 3 28 10,000 24 8,000 2 20 2.05 2.08 16 6,000 12 4,000 1 8 2,000 4 0 0 0 1H 2003 1H 2004 1H 2003 1H 2004 Crude Oil Natural Gas 30

  15. Slide 15: Refining – Increased Throughput to Meet Market Demand

    Refining – Increased Throughput to M eet Market Demand 1H 04 1H 03 Change (%) Crude Oil Processed (mm tonnes) 64.98 54.70 18.79 - Sour Crude Oil Processed (mm tonnes) 13.39 10.64 25.85 Refining Utilization Rate (%) 91.57 83.30 827 bps Gasoline Production (mm tonnes) 11.42 10.25 11.41 Diesel Producti

  16. Slide 16: Refining — Segment Performance

    Refining — Segment Performance Refining Margin / EBIT of Refining Segment Cash Operating Cost USD/bbl RMB million 4,500 4,251 5.00 2.20 4.07 4,000 4.00 3.96 2.10 3,500 3,000 2,644 3.00 2.00 2,500 2.02 1.98 2,000 2.00 1.90 1,500 1.00 1.80 1,000 500 0.00 1.70 0 1H2003 1H2004 1H 2003 1H 2004 Refining M

  17. Slide 17: Marketing — Optimized Marketing Network, Expanded Retail and Distribution

    Marketing — Optimized Marketing Networ k, Expanded Retail and Distribution 1H 04 1H 03 Change (%) Domestic Sales of Refined Oil 45.49 35.24 29.09 Products (mm tonnes) Incl. Retail (mm tonnes) 25.12 17.83 40.89 Distribution (mm tonnes) 9.56 6.92 38.15 Wholesale (mm tonnes) 10.81 10.49 3.05 Owned or O

  18. Slide 18: Marketing – Segment Performance

    Marketing – Segment Performance RON #90 Gasoline Guidance Price EBIT of Marketing Segment RMB/Tonne 4000 RMB million 3000 9,000 8,569 2000 8,000 Jan Mar May Jul Sep Nov 7,000 2002 2003 2004 6,000 5,461 5,000 #0 Diesel Guidance Price 4,000 RMB/Tonne 3,000 4000 2,000 1,000 3000 0 2000 1H 2003 1H 2004

  19. Slide 19: Chemicals — Fully Loaded to Meet Market Demand

    Chemicals — Fully Loaded to Meet Ma rket Demand 1H 04 1H 03 Change (%) Unit: 1,000 tonnes Ethylene 1,863 1,724 8.06 Synthetic Resins 2,806 2,529 10.95 Ratio of Performance Compound 57.11% 55.43% 168 bps Synthetic Fibers 641 598 7.19 Ratio of Differential Fibers 45.11% 40.26% 485 bps Monomers & Polym

  20. Slide 20: Chemicals – Segment Performance

    Chemicals – Segment Performance Chemicals Price Spreads (1990 - Jul. EBIT of Chemicals Segment 2004) RMB million USD/tonne 1200 6,000 4,924 1000 5,000 800 4,000 600 3,000 400 2,000 858 200 1,000 0 0 90-1-1 91-1-1 96-1-1 97-1-1 98-1-1 00-1-1 01-1-1 02-1-1 03-1-1 92-1-1 93-1-1 94-1-1 95-1-1 99-1-1 04-

  21. Slide 21: Cost Reduction

    Cost Reduction Cost Reduction in 1H 2004 was RMB1.43 bn RMB million • Optimized resource allocation and lo 3000 gistics to reduce transportation cost s 2500 2000 • Further increased sour crude throug hput to reduce crude oil procuremen 1500 t costs 1000 • Optimized operation of facilities to re duce

  22. Slide 22: Capital Expenditure

    Capital Expenditure 1H 2004 Capex: RMB25.82 bn • E & P –10.07 bn, improved reserve profile 1H 2004 Capex Breakdown and increased production capacity of oil a nd gas 0.36% • Refining – 4.10 bn, Ningbo-Shanghai-Nanji ng pipeline was put into operation, and a 33.35% 39.01% number of revamping projects

  23. Slide 23: 2H 2004 Business Prospects

    2H 2004 Business Prospects

  24. Slide 24: Market Environment in 2H 2004

    Market Environment in 2H 2004  Global economy expected to keep its recovery momentum  Global oil demand continue to grow  Refining margin is to remain at relatively good level, and chemical businesses continue upturn cycle  Chinese economic growth expected to maintain relative fast pace, resulti

  25. Slide 25: E&P

    E&P  Pursue expand resource strategy and speed up exploration and development  Accelerate construction of production capacities  Enhance production management to reduce cost 2H 2004 Production Projection Crude Oil 19.466 mm tonnes Natural Gas 2.966 bn cubic meters 30 August 2004 25

  26. Slide 26: Refining

    Refining  Optimize resources and reduce crude oil procurement cost  Optimize crude oil transportation to reduce cost  Adjust product mix according to market demand  Implement reform of marketing system for products other than gasoline, diesel and jet fuel 2H 2004 Production Projection Refining T

  27. Slide 27: Marketing

    Marketing  Accelerate expansion of marketing network for refined oil products  Promote reform of marketing system for refined oil products  Improve quality of service and increase sales volume 2H 2004 Production Projection Total domestic sales volume 45.50 mm tonnes Incl.: Retail Volume 25.37 mm

  28. Slide 28: Chemicals

    Chemicals  Maintain a stable full-load operation at major facilities and ensure smooth progress of revamping projects  Optimize allocation of raw material and resources  Increase production of high value-added products  Continue reform of marketing system for chemical products 2H 2004 Production

  29. Slide 29: Seize Market Opportunities to Accelerate Development

    Seize Market Opportunities to Accelerate Development 2004 Capex 2004 Capex Plan Adjustment RMB billion 56.3  E&P-Added 1.24 bn to construct natur 60 50.2 al gas and oil pipelines 50  Refining – Added RMB1.68 bn to spee 40 d up revamping of a number of project s 30  Chemicals – Added RMB1.15 bn to

  30. Slide 30: Conclusion

    Conclusion  Adhere to key operating guidance featuring “reform, rationalization, innovation and development”  Seize market opportunities and adopt flexible operating tactics to increase production volumes Maintain Sound Operating Results 30 August 2004 30

  31. Slide 31: For Further Information

    For Further Information http://www.sinopec.com.cn Investor Relations Media Relations Beijing: Tel: (8610) 64990060 Fax: (8610) 64990489 Tel: (8610) 64990092 Email: ir@sinopec.com.cn Fax: (8610) 64990093 Hong Kong: Tel: (852) 28242638 Fax: (852) 28243669 Email: media@sinopec.com.cn Email: ir@sinopech

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