China Petroleum & Chemical Corporation Class A · SSE:600028

China Petroleum & Chemical Corporation Class A — FY2002 Earnings Presentation

30 slides from China Petroleum & Chemical Corporation Class A's earnings presentation, Mar 31, 2003

  1. Slide 1: China Petroleum & Chemical Corporation Results for the Year Ended December 31, 2002

    China Petroleum & Chemical Corporation Results for the Year Ended December 31, 2002 March 31, 2003 Hong Kong 1

  2. Slide 2: Forward Looking Statement

    Forward Looking Statement 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

  3. Slide 3: Agenda

    Agenda  2002 Performance Highlights  2002 Review of Operations  2003 Plans and Objectives 3

  4. Slide 4: 2002 Performance Highlights

    2002 Performance Highlights 4

  5. Slide 5: Market Overview

    Market Overview  Robust economic growth in China, GDP growth of 8.0%  Domestic consumption of refined products increased by 5.1%  Domestic consumption of chemicals increased by 11.1%  Government continues to rationalize market environment, significant improvement in refined oil market environmen

  6. Slide 6: Continue to Deliver Good Operating Results

    Continue to Deliver Good Operating Results Segmental EBIT Performance 2002/2001 RMB Bn 2000 2001 2002 yoy (%) RMB Bn 40 35 2.4 Revenue 331.58 318.47 340.04 6.8 30 6.4 0.3 0.07 1.4 2.4 25 8.4 EBITDA 56.29 49.73 52.56 5.7 2.1 20 5.9 EBIT 35.51 27.30 28. 28 3.6 15 25.4 23.2 10 Net Profit 19.58 16.03 16

  7. Slide 7: 2002 Balance Sheet and Cash Flow Summary

    2002 Balance Sheet and Cash Flow Summary 2002/2001 yoy (%) 2000 2001 2002 RMB Bn Short-term Debt 59.1 49.2 35.6 -27.6 Long-term Debt 71.0 67.0 75.2 12.2 Shareholders’ Equity 133.2 147.7 154.5 4.6 Cash from Operating Activities 29.2 55.3 53.9 -2.5 Cash from Investing Activities -64.3 -38.5 -42.7 10.9

  8. Slide 8: Stable Returns, Optimal Leverage

    Stable Returns, Optimal Leverage ROCE Change Debt / Total Capital and EBITDA Interest Coverage ROCE % Debt / EBITDA 12 Total Capital % Interest Coverage 9.99 10 35 33.01 14 13.1 12 8 6.96 7.24 30 10.6 10 6 8.4 28.06 26.01 8 25 6 4 20 4 2 2 0 15 0 2000 2001 2002 2000 2001 2002 Debt / Total Capital EB

  9. Slide 9: Corporate Governance

    Corporate Governance  Strictly comply with the regulatory requirements in the 4 listing locations; conduct comprehensive and systematic review and revision on corporate governance documents, including Article of Associations to maintain the highest standard of corporate governance and integrity  S

  10. Slide 10: Continued Reform and Restructuring

    Continued Reform and Restructuring  Improved business structure , more efficient management  E&P — establish Southern E&P Sub., Shanghai Offshore Oil and Gas Sub.  Refining — establish lubricants subsidiary, implement specialized sales management  Refining, chemical and marketing — flatten manag

  11. Slide 11: 2002 Review of Operations

    2002 Review of Operations 11

  12. Slide 12: E&P — Expand Resources

    E&P — Expand Resources Jungar Basin • East – significant exploration ac hievements in burial hills, new a nd subtle layers in Shengli Oil bl Ordos Basin ocks etc. Shengli Oilfield • West – Significant discoveries: Zhongyuan industrial oil & gas flow at Zhua Oilfield ng # 1 in Jungar basins, good in

  13. Slide 13: E&P — Continued Production Growth in Oil & Gas

    E&P — Continued Production Growth in Oil & Gas 2002/2001 2000 2001 2002 yoy (%) Crude Oil Production (MM bbls) 247.4 269.2 269.8 0.2 Natural Gas Production (bcf) 80.3 162.8 178.8 9.8 Newly Added Recoverable Reserves 318 316 375 18.7 of Crude Oil (MM bbls) Newly Added Recoverable Reserves 297 309 20.

  14. Slide 14: E&P — Segment Performance

    E&P — Segment Performance International Crude Oil Price E&P Segment EBIT RMB MM USD/bbl 40 35 WTI WTI Brent 布伦特 辛塔Cinta 30,000 30 25,411 25 25,000 23,185 20 15 20,000 10 14,787 J un- 01 Aug- 01 Oct- 01 Feb- 02 Apr- 02 J un- 02 Dec- 02 Dec- 00 Feb- 01 Apr- 01 Dec- 01 Aug- 02 Oct- 02 Feb- 03 15,000 So

  15. Slide 15: Refining - Production Adjustments in Line with Market

    Refining - Productions Adjustments in Line with Market. Improved Product Structure 2000 2001 2002 2002/2001 yoy (%) Crude Oil Processed (MM tonnes) 105.48 101.42 105.01 3.5 Refining Utilization Rate (%) 81.0 77.9 79.3 140bps Sour Crude Oil Processed (MM tonnes) 13.82 19.25 20.01 3.9 Gasoline Product

  16. Slide 16: Refining — Segment Performance

    Refining — Segment Performance Refining Segment EBIT Refining Margin / Cash Operating Cost RMB MM (USD/bbl) 5 2.5 7,000 5,922 6,000 3.95 4 5,000 3.62 3.57 4,000 2.14 3 2.07 2 2.03 3,000 2,106 2,000 2 1,394 1,000 1 1.5 0 2000 2001 2002 2000 2001 2002 Refining Margin Cash Operating Cost 16

  17. Slide 17: Marketing — Optimizing Marketing Network and Expanding Retail

    Marketing — Optimizing Marketing Network and Expanding Retail and Distribution Volume 2002/2001 2000 2001 2002 yoy (%) Domestic Sales Volume of Refined Produ 67.69 67.74 70.09 3.5 cts (MM tonnes) Retail (MM tonnes) 23.94 30.43 34.73 14.1 Distribution (MM tonnes) NA 11.64 12.63 8.5 Wholesale (MM tonn

  18. Slide 18: Marketing — Segment Performance

    Marketing — Segment Performance RON 90# Gasoline Guidance Price Marketing Segment EBIT Analysis RMB/Tonne RMB MM 10,000 4000 8,401 8,000 6,358 3000 6,000 4,000 2000 2,443 Jan Mar May Jul Sep Nov 2,000 2001 2002 0 0# Diesel Guidance Price 2000 2001 2002 -2,000 RMB/Tonne -4,000 4000 EBIT Wholesale Ret

  19. Slide 19: Chemicals — Full-load Production in Line with Market

    Chemicals — Full-load Production in Line with Market 2002/2001 ('000 tonnes ) 2000 2001 2002 yoy (%) Ethylene 2,165 2,153 2,716 26.2 Synthetic Resin 3,183 3,204 4,005 25.0 Incl. Performance Compound 1,280 1,332 1,847 38.7 Synthetic Rubber 317 398 458 15.0 Monomers & Polymers for Synthetic Fiber 3,79

  20. Slide 20: Chemicals — Segment Performance

    Chemicals — Segment Performance Ethylene Capacity vs Cash Operating Cost Chemicals Segment EBIT (RMB MM) ’000 Tonnes USD/Tonne 3000 183.17 160.06 200 150.28 2500 150 3,000 1,985 2,795 2000 2,195 100 2,437 2,500 1500 50 1000 0 2,000 2000 2001 2002 1,500 Ethylene Capacity Cash Operating Cost 1,000 Che

  21. Slide 21: Cost Reduction

    Cost Reduction 2002 Cost Reduction Result RMB MM 504  Reduce procurement cost in large 702 quantity purchase of raw material s  Reduce energy and materials con sumption 621 698  Control expenses E&P Refining Marketing Chemicals  Head count reduction of some 25 thousands. Total RMB 2.525Bn 21

  22. Slide 22: Prudent Investment to Enhance Return

    Prudent Investment to Enhance Return Capex in the Past 3 Years 2002 Total Capex of Rmb41.6b. (RMB Bn) Breakdown as Follows: 70 60 • E & P –Rmb20.2b to increase in reserves and production 50 • Refining – Rmb6.5b to increase clean fu 40 el production capacity 30 • Marketing – Rmb 7.0b to acquire, buil

  23. Slide 23: Smooth Progress on JV Projects

    Smooth Progress on JV Projects • 600 ktpa ethylene project JV commenced constru ction, expected completi on in 2004 Nanjing • 900 ktpa ethylene project JV i Shanghai n Shanghai commenced const ruction, expected completion i Retail JV Programs n 2005 on Track Dongting Fujian • Feasibility study for F

  24. Slide 24: 2003 Plans and Objectives

    2003 Plans and Objectives 24

  25. Slide 25: 2003 Market Outlook

    2003 Market Outlook Opportunities • The Chinese economy will continue to be robust with GDP growth forecasted at a minimum 7.0%, growth in refined oil products and chemical products at a minimum rates of 4.0% and 10.0% respectively. • International crude oil price remains at a relatively high level

  26. Slide 26: 2003 Production Plan

    2003 Production Plan 2003E/2002 2002 2003E Change Crude Oil Production (mm bbl) 269.8 270.5 0.3 Natural Gas Production (bcf) 178.8 187.1 4.6 Refining Throughput 105.01 110.92 5.6 (MM tonnes) Domestic Sales of Refined Oil Pro 70.09 73.0 4.2 ducts (MM tonnes) Retail (MM tonnes) 34.73 37.5 8.0 Ethylene

  27. Slide 27: 2003 Capex Plan

    2003 Capex Plan RMB Bn Goals: 0.62 • Increase new oil and gas replacement 7.64 resources • Further enhance quality of refined oil products 18 • Improve marketing network 5 • Construct crude oil pipeline and start to construct refined oil products pipeline 6.34 • Expand and revamp chemicals capacity

  28. Slide 28: 2003 Cost Reduction Plan

    2003 Cost Reduction Plan 2003 Cost Reduction Plan 2000 2001 2002 2003E RMB MM E&P Lifting Cost 6.63 6.15 6.12 6.04 400 (USD/bbl) (Note) 1000 Refining Cash Operating 2.14 2.07 2.03 2.00 Cost (USD/bbl) 500 Ethylene Cash Operating 184 160 150 148 600 Cost (USD/tonne) E&P Refining Marketing Cash 181 163

  29. Slide 29: Conclusion: Generate Attractive Investment Return

    Conclusion  Healthy and stable growth of China’s economy provides a favorable en vironment for Sinopec’s development  Integrated business structure provides strong anti-risk capability for in dustrial cycles  Recovering refinery margins, an upturn in the petrochemical cycle and an improvement in

  30. Slide 30: For Further Information

    For Further Information http://www.Sinopec.com Investor Relations Media Inquiries Tel: (8610) 64990066 Tel: (8610) 64990064 Fax: (8610) 64990067 Fax: (8610) 64990093 Email: ir@Sinopec.com Email: media@Sinopec.com 30

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