China Petroleum & Chemical Corporation Class A · SSE:600028

China Petroleum & Chemical Corporation Class A — H1 2002 Earnings Presentation

30 slides from China Petroleum & Chemical Corporation Class A's earnings presentation, Aug 19, 2002

  1. Slide 1: China Petroleum & Chemical Corporation 2002 First Half Results Announcement

    China Petroleum & Chemical Corporation 2002 First Half Results Announcement August 19, 2002 Hong Kong

  2. Slide 2: Agenda

    Agenda • Market Overview and Performance Highlights • Review of Operations • 2H 2002 Outlook August 19, 2002 3

  3. Slide 3: Market Overview and Performance Highlights

    Market Overview and Performance Highlights

  4. Slide 4: Market Overview I

    Market Overview I  Robust economic growth in China, GDP growth of 7.8%  Domestic consumption of refined products increased by 2.72%  Significant growth in domestic chemicals demand, consumption increased by 14.5%  Crude oil, refined product and chemical prices have been bottomed out in January a

  5. Slide 5: Market Overview II

    Market Overview II (US$ / bbl) International Crude Oil Prices 31 29 27 25 23 21 19 Brent WTI 17 Cinta Duri 15 2001.01 2001.04 2001.07 2001.10 2002.01 2002.04 Gasoline #90, Diesel #0 - Ex-Refinery Prices SE Asia Chemical Product Prices 3,000 (RMB / tonne) (US$ / tonne) 2,750 750 PTA LDPE Film Grade 7

  6. Slide 6: Operating Performance — Maintain Strong Profitability Amid Adverse Market Environment

    Operating Performance — Maintain Strong Profitability Amid Adverse Market Environment EBIT Analysis (RMB Bn) 16.46 0.67 4.54 Tariff reduction 0.96 0.10 10.71 Q2 3.75 1.3 Decline in 1.26 Crude Price Compressed 1.40 1.55 0.47 Others No Employee Refining Margin 0.88 Cost Reduction Expenses Increase Red

  7. Slide 7: Operating Performance — Grow Volume

    Operating Performance — Grow Volume Q1 02 Q2 02 1H 01 1H 02 Change (%) 65.91 66.56 Crude Oil Production (MM bbls) 131.73 132.43 0.53 41.8 46.0 Natural Gas Production (bcf) 71.1 87.8 23.5 23.94 27.00 Crude Oil Processed (MM tonnes) 51.94 50.94 -1.9 74.5 82.9 Refining Utilization Rate (%) 80.4 79.4 -1

  8. Slide 8: Operating Performance — Financial Highlights

    Operating Performance — Financial Highlights Q1 02 Q2 02 (RMB Bn) 1H 01 1H 02 Change (%) 66.00 80.20 Revenue 165.82 146.20 -11.8 7.52 14.53 EBITDA 26.90 22.05 -18.0 1.61 9.10 EBIT 16.46 10.71 -35.0 0.54 4.89 Net Profits 9.98 5.43 -45.6 0.006 0.057 EPS (RMB) 0.119 0.063 -47.1 NA NA DPS (RMB) NA 0.02

  9. Slide 9: Operating Performance — Capitalization and Cashflow

    Operating Performance — Capitalization and Cashflow (RMB Bn) FY 01 1H 02 Change (%) Short-term Debts 45.35 37.45 -17.4 Long-term Debts 30.88 33.24 7.6 Shareholders’ Equity 147.67 145.57 -1.4 Debt-to-Capital Ratio (%) 28.06 27.25 -81bps EBITDA / Interest Coverage (x) 9.1* 9.7 0.6x 1H 01 1H 02 Change

  10. Slide 10: Review of Operations

    Review of Operations

  11. Slide 11: E&P — Continued Production Growth in Oil & Gas

    E&P — Continued Production Growt h in Oil & Gas 1H 01 1H 02 Change (%) New Proved Oil & Gas Reserves (MM boe) 217.23 213.57 -1.68 Period End Proved Oil & Gas Reserves (MM boe) 3,844 3,877 0.86 New Crude Oil Production Capacity (MM boe) 8.66 21.66 150 New Natural Gas Production Capacity (bcf) 3.53 12

  12. Slide 12: E&P — Segment Performance

    E&P — Segment Performance Crude Oil and Natural Gas Realized Price E&P Segment EBIT Crude oil price Natural gas price (RMB MM) (US$ / bbl) (US$ / ’000 cf.) 14,000 27 2.5 12,000 12,169 24.32 10,000 24 2.3 2.00 8,000 2.1 6,000 6,610 21 19.97 1.9 4,000 18 1.93 2,000 1.7 0 15 1.5 1H 2001 1H 2002 1H 2001

  13. Slide 13: Refining — Production Adjustments in Line with Market

    Refining — Production Adjustments in L ine with Market 1H 01 1H 02 Change (%) Crude Oil Processed (1,000 bbl / day) 2,109 2,069 -1.9 Refining Utilization Rate (%) 80.4 79.4 -100bps Gasoline Production (MM tonnes) 9.7 9.2 -5.2 Diesel Production (MM tonnes) 18.6 18.8 1.1 Kerosene Production (MM tonnes

  14. Slide 14: Refining — Segment Performance

    Refining — Segment Performance Refining Margins / Cash Operating Cost Refining Segment EBIT (US$ / bbl) (RMB MM) 3,000 5.00 2.20 2,776 2,500 4.00 3.67 3.48 2.16 2,000 3.00 2.12 1,500 1,589 2.00 2.07 2.08 1,000 1.00 2.02 2.04 500 0.00 2.00 0 1H2001 1H2002 1H 2001 1H 2002 Refining Margin Cash Operatin

  15. Slide 15: Marketing — Expanding Marketing Network and Retail Volume

    Marketing — Expanding Marketing Ne twork and Retail Volume 1H 01 1H 02 Change (%) Domestic Sales of Refined Products 33.68 34.07 1.2 (MM tonnes) Retail (MM tonnes) 14.23 16.86 18.5 Distribution (MM tonnes) 5.48 6.18 12.8 Share in Principal Retail Markets (%) 63 67 400bps Owned or Operated Gas Statio

  16. Slide 16: Marketing — Segment Performance

    Marketing — Segment Performance Marketing Segment EBIT Gasoline #90 Retail Guidance Price ( Analysis 4,000 RMB / tonne) (RMB MM) 4,000 3,283 3,000 3,500 2,000 974 1,000 0 3,000 -1,000 -2,000 2,500 -3,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1H 2001 1H 2002 Diesel #0 Retail Guidance Price

  17. Slide 17: Chemicals — Production Adjustments in Line with Market

    Chemicals — Production Adjustment s in Line with Market 1H 01 1H 02 Change (%) (1,000 tonne) Ethylene 1,146 1,245 8.7 Synthetic Resins 1,678 1,838 9.5 Synthetic Rubbers 201 217 7.9 Monomers & Polymers for Synthetic Fibers 1,844 1,895 2.8 Synthetic Fibers 493 568 15.2 % of Performance Compound in Syn

  18. Slide 18: Chemicals — Segment Performance

    Chemicals — Segment Performance Domestic Chemical Prices Chemicals Segment EBIT (RMB / tonne) (RMB MM) 9,000 400 8,500 200 186 8,000 0 7,500 -200 7,000 -400 -476 -600 6,500 -800 6,000 1H 2001 1H 2002 400 5,500 200 215 5,000 0 4,500 -200 4,000 -400 -600 -691 PTA PET Fiber Grade -800 LDPE Film Grade P

  19. Slide 19: Cost Cutting

    Cost Cutting 2002 Interim Actual Cost Cutting RMB 1,259MM (RMB MM) • E&P Cost cutting in raw material procurem 287 ent e.g. crude oil Refining 399 • Reduce energy and material consump Chemicals tion 242 • Optimize resources allocation and log istics • Efficiency gained from headcount red uction last

  20. Slide 20: Prudent Investment to Enhance Return

    Prudent Investment to Enhance Return 1H 2002 Capex Allocation • E & P – RMB 9,502MM, 100% increase new reserves and production E&P 47.7% 80% • Refining – RMB 2,660MM, improve quality of refined product Refining 13.4% 60% • Marketing – RMB 3,477MM, new-build Marketing 17.5% and upgrade existing retai

  21. Slide 21: Smooth Progress on JV Projects

    Smooth Progress on JV Projects • Feasibility study for Fujian inte • Dongting coal gasification JV e • Shanghai Seco ethylene project grated petrochemical project su stablished; project commence commenced construction, expec bmitted for government approv d construction ted completion in 2005 al • ZR

  22. Slide 22: Comprehensive Enterprise Information Technology Enhancement

    Information Technology Enhancement Continuous Financial Mgmt. Materials System Procurement B-2-B Apply Modern IT System to Refined Products Chemicals Enhance Performance of Traditional Businesses Sales System Marketing B-2-B Resources Planning System Comprehensive Enterprise Development Cost Control

  23. Slide 23: 2H 2002 Outlook

    2H 2002 Outlook

  24. Slide 24: 2002 Market Outlook

    2002 Market Outlook  Global economic outlook remains uncertain, but China’s economy will maintain strong growth momentum  International crude oil price remains at a relatively high level  Refining margin remains stable at current level  Chemical prices rebound in second half as the industry has

  25. Slide 25: E&P 2H 02 Plan

    E&P 2H 02 Plan ：Growth from 1H (%)  Crude Oil Production Zhongyuan Jungel Basin Oil Field 136MM bbl 1.6  Natural gas production Ordos Basin 88.3bcf 0.6 Shengli Oil Field Tarim Basin East China Sea Sichuan Basin Oil & Gas Field South China Sea August 19, 2002 26

  26. Slide 26: Refining

    Refining  Optimize resources and reduce crude procurement cost  Optimize products slate, increase chemical feedstock products  Improve refining utilization rate through increasing external raw materials pro cessing and expanding refining products export  Increase light stream and refining yield

  27. Slide 27: Marketing

    Marketing  Improve coordination and cooperation with market players to create a healthy market and stabilize product prices  Increase market share by optimizing sales structure and ex panding market  Develop network in highways, marine and rural areas  JV with Shell, bp, ExxonMobil in gas statio

  28. Slide 28: Chemicals

    Chemicals 1H 02 Actual 2H 02 Plan Growth (%) (Unit 1,000 tonnes) Ethylene 1,245 1,335 7.2 Synthetic Resins 1,838 2,122 15.5 Synthetic Rubbers 217 233 7.4 Monomers & Polymers for Synthetic Fibers 1,895 1,915 1.1 Synthetic Fibers 568 569 0.2 Sales-to-Production Ratio 99.6% 100.0% 40bps August 19, 2002

  29. Slide 29: Conclusion: Generate Attractive Investor Return

    Conclusion  Robust economic growth in China; rationalize environment in refined products market, improve operating environment  Grow production volume in oil and gas, refining and chemical products  Flexible operating strategies to reduce cost and improve efficiency  Prudent investment - adjust

  30. Slide 30: For Further Information

    For Further Information http://www.Sinopec.com Investor Relations Media Inquiries Tel: (8610) 64990060 Tel: (8610) 64990064 Fax: (8610) 64990067 Fax: (8610) 64990093 Email: ir@Sinopec.com Email: media@Sinopec.com August 19, 2002 31

China Petroleum & Chemical — H1 2002 Earnings Presentation on 6ix