ANNOUNCEMENT OF PRELIMINARY RESULTS YEAR ENDED 31 MARCH 2006 1 June 2006.
China Petroleum & Chemical Corporation 1H 2006 Results Announcement August 28, 2006 Hong Kong.
-
Upload
bernice-cook -
Category
Documents
-
view
221 -
download
2
Transcript of China Petroleum & Chemical Corporation 1H 2006 Results Announcement August 28, 2006 Hong Kong.
China Petroleum & Chemical Corporation
1H 2006 Results Announcement
August 28, 2006Hong Kong
2006-8-28 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.
2006-8-28 3
Agenda
1H 2006 Financial Highlights
Growth Strategy
1H 2006 Operational Results
2H 2006 Business Prospects
1H 2006 Financial Highlights
2006-8-28 5
Profit Growth
RMB million 1H 2006 1H 2005 Change%
Turnover and other operating revenues 493,128 368,454 33.84
EBITDA 50,742 48,837 3.90
EBIT 34,238 33,682 1.65
Profit attributable to:
Equity shareholders of the Company 21,406 19,653 8.92
Minority interests 158 2,116 -92.53
EPS(RMB) 0.247 0.227 8.92
2006-8-28 6
Financial Position
RMB millionAs of 30 June
2006As of 31 Dec. 200
5
Short-term debt 65,199 40,411
Long-term debt 68,279 67,059
Total equity attributable to equity shareholders of the Company
237,159 223,556
RMB million 1H 2006 1H 2005
Net cash flow from operating activities 21,478 21,082
Net cash flow from investing activities -54,327 -31,400
Net cash flow from financing activities 29,050 7,553
Cash & cash equivalents - beginning balance 13,745 16,381
Cash & cash equivalents - ending balance 9,939 13,616
2006-8-28 7
ROCE and Dividend
0.040.040.04
0.090.08
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
2004 2005 1H2006
Interim Dividend Final Dividend
ROCE
5.5%
12.0%12.8%
0%
3%
5%
8%
10%
13%
15%
2004 2005 1H 2006
ROCE for 1H 2006 is not annualized
Dividend Per ShareRMB Yuan
Growth Strategy
2006-8-28 9
Market Environment
Continued high crude prices
Cyclical fluctuation in petrochemical industry
Chinese economy expected to maintain rapid growth Domestic demand for oil products and petrochemicals will
continue to grow
Increasing competition, along with gradual opening up of markets
2006-8-28 10
Improve Governance and Deepen Reforms
Improve governance practices Expand roles of Audit Committee, Strategic Committee,
Remuneration & Examination Committee, and Independent Directors
Enforce internal controls and improve risk management
Deepen management reforms Integrate management of business units and subsidiaries
Empower business units to enhance efficiency
Strengthen centralized decision-making process for significant business activities and allocation of resources
2006-8-28 11
Expand Resources
Stabilize mature fields Develop new fields Explore new areas
Tarim Basin
Chaidamu Basin
Sichuan Basin
Ordos Basin
SongliaoBasin
x10,000 tonnesoil equivalent
0
1000
2000
3000
4000
5000
6000
2005 2006E 2007E 2008E
Crude oil Natural gas
Production Outlook
2006-8-28 12
Puguang Gas Field in Northeast Sichuan
9 bcm per annum of capacity by 2008
12 bcm per annum of capacity by 2010
Puguang
DawanMaoba
Shuangmiao
2006-8-28 13
Expand Markets
Refined oil marketing Leverage brand to increase
retail and direct sales
Chemical products Leverage centralized
marketing to increase direct sales and increase competitiveness
Increase direct sales of chemical products to 65%
million tonnes
Sales Outlook for oil products
0
20
40
60
80
100
120
140
2005 2006E 2007E 2008E
30%
40%
50%
60%
70%
80%
90%
WholesalesDirect SalesRetailPercentage of termical sales,%
2006-8-28 14
Align Refining & Chemicals Capacity with Market Demand and Resource Availability
Ethylene Capacity
7,1006,0155,8155,395
0
2,000
4,000
6,000
8,000
2005 2006E 2007E 2008E
Refining Capacity187.0
163.1156.2148.9
0
50
100
150
200
2005 2006E 2007E 2008E
Million tonnes
Thousand tonnes
2006-8-28 15
Develop Modern Logistics
By year 2008 , 90% of crude oil and 40% of oil products shall be transported through pipelines
2006-8-28 16
Improve Assets Value through Innovation
Improve scientific & technological innovation capabilities
Develop proprietary technology
Integrate various existing technologies to achieve leading edge
Adapt and improve licensed technology
Employ proprietary technology in key areas Exploration and production of oil and gas
Efficient use of resources
2006-8-28 17
Focus on Environment and Conservation
Improve HSE management
Conserve energy and protect environment
Leverage scientific & technological advances to achieve clean production
Expand recycling and use resources more efficiently
Achieve low consumption and low emission
1H 2006 Operational Results
2006-8-28 19
Review of Market Environment
China’s GDP grew at 10.9% Domestic consumption of oil products increased by 7.1%
Domestic consumption of petrochemicals (ethylene equivalent) increased by 6.3%
International crude oil prices were high and volatile
Petrochemical prices remained high
Refined oil products still subject to price controls
2006-8-28 20
E&P – Operational Summary
1H 2006 1H 2005 Change%
Crude oil production (mm bbls) 140.89 136.69 3.07
Natural gas production (bcf) 126.2 104.8 20.42
Lifting cost (RMB/tonne) 461 410 12.43
Newly added proved reserves of crude oil (mmbbls)
143.89 85.69 67.92
Newly added proved reserves of natural gas (bcf) 175.5 518.1 -66.13
30 Jun. 2006
31 Dec. 2005
Change%
Proved reserves of crude oil (mm bbls) 3,297 3,294 0.09
Proved reserves of natural gas (bcf) 3,001.0 2,951.7 1.67
Proved reserves of oil and gas (mm boe) 3,797 3,786 0.29
2006-8-28 21
E&P - Segment Performance
17,795
33,344
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
1H 2005 1H 2006
2,316
3,310
748
660
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1H 2005 1H 2006
0
100
200
300
400
500
600
700
800
900
Crude oil Natural Gas
Crude Oil and Natural GasRealized Price
EBIT of E&P Segment
Crude OilRMB/tonne
Natural GasRMB/’000 cubic meter
RMB million
2006-8-28 22
Refining- Operational Summary
1H 2006 1H 2005 Change%
Crude Oil Processed (mm tonnes) 71.68 68.08 5.29
- Sour Crude Oil Processed (mm tonnes) 17.60 16.87 4.33
Gasoline Production (mm tonnes) 11.23 11.32 -0.80
Diesel Production (mm tonnes) 28.32 26.31 7.64
Kerosene Production (mm tonnes) 3.18 3.39 -6.19
Light Chemical Feedstock Production (mm tonnes)
11.47 10.16 12.89
Light Yield (%) 74.81 74.24 57bps
Refining Yield (%) 93.73 93.11 62bps
2006-8-28 23
Refining - Segment Performance
Refining Margin / Cash Operating Cost
Refining Margin(RMB/tonne)
EBIT of Refining Segment
RMB million
-93
141
118.00117.00
-150.00
-100.00
-50.00
0.00
50.00
100.00
150.00
1H 2005 1H 2006
-150.00
-100.00
-50.00
0.00
50.00
100.00
150.00
Refining MarginCash Operating Cost
-16,610
-1,296
-19,000
-17,000
-15,000
-13,000
-11,000
-9,000
-7,000
-5,000
-3,000
-1,000
1,000
1H 2005 1H 2006
Cash Operating Cost(RMB/tonne)
2006-8-28 24
Marketing – Operational Summary
1H 2006 1H 2005 Change%
Domestic sales of refined oil products (mm tonnes)
54.32 50.77 6.99
Incl. Retail (mm tonnes) 35.33 29.56 19.52
Distribution (mm tonnes) 9.69 10.39 -6.74
Total gas stations 29,198 30,352 -3.80
Incl. Self-operated stations 27,628 26,870 2.82
Franchised stations 1,570 3,482 -54.91
Annual average throughput of self-operated st
ations (tonnes/station)2,558 2,200 16.27
2006-8-28 25
Marketing - Segment Performance
2000
3000
4000
5000
6000
Jan Mar May Jul Sep Nov
2003 2004 2005 2006
2000
3000
4000
5000
6000
Jan Mar May Jul Sep Nov
2003 2004 2005 2006
RMB/tonne 1H2005 1H2006
Marketing cash operating cost
149.93 149.75
6,643
10,761
0
2,000
4,000
6,000
8,000
10,000
12,000
1H 2005 1H 2006
RON #90 Gasoline Guidance PriceRMB/Tonne
EBIT of Marketing Segment
RMB million
#0 Diesel Guidance Price
RMB/Tonne
2006-8-28 26
Unit: 1,000 tonnes 1H 2006 1H 2005 Change%
Ethylene 3,031 2,434 24.53
Synthetic resin 4184 3,528 18.59
Monomers & polymers for synthetic fibers 3577 3,152 13.48
Synthetic fiber 770 756 1.85
Synthetic rubber 318 308 3.25
Urea 906 998 -9.22
100% production from YPC-BASF and Shanghai-Secco was included.
Chemicals — Operational Summary
2006-8-28 27
Chemicals - Segment Performance
0
200
400
600
800
1000
1200
Jan-1990 Jan-1993 Jan-1996 Jan-1999 Jan-2002 Jan-2005
LDPE-Naphtha PP-Naphtha
RMB/tonne 1H2005 1H2006
Ethylene cash operating cost
1,236 1,262
10,815
7,198
0
2,000
4,000
6,000
8,000
10,000
12,000
1H 2005 1H 2006
Chemicals Price Spread (1990 - Jul. 2006)
USD/tonne
EBIT of Chemicals SegmentRMB million
2006-8-28 28
Cost Saving
1382
2500
0
500
1,000
1,500
2,000
2,500
3,000
2006 plan 1H2006 Actual
E&P Refining Marketing Chemicals
RMB million
1H2006 Cost Saving
2006-8-28 29
Capital Expenditure
1H2006 Capex
RMB million
30,452
70,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2006 Plan 1H 2006 Actual
E & P RefiningMarketing ChemicalsCorporate & Others
Exploration and Production: RMB 11.68 billion. Newly built production capacity of crude oil and natural gas was 2.95 million tonnes per year and 758 million cubic meters per year respectively
Refining: RMB 5.12 billion. Construction of the Yizheng-Changling crude oil pipeline completed; the refinery revamping projects in Guangzhou, Yanshan and Qingdao progressed smoothly
Marketing and Distribution: RMB 6.68 billion. Construction and acquisition of gas stations in key areas continued with 353 newly added stations
Chemicals: RMB 5.93 billion. Maoming ethylene expansion project, ethylene projects of Fujian and Tianjin as well as other projects such as synthetic fiber materials, synthetic rubber, and the fertilizer facilities revamping projects were proceeding on schedule.
2H 2006 Business Prospects
2006-8-28 31
Market Environment
China’s economy is expected to maintain its rapid growth
Demand for oil products and petrochemicals will increase steadily
International crude oil prices and chemical prices will remain high
Refining business will remain under pressure
Intensified market competition in domestic refined oil products (WTO – opening of wholesale end 2006)
2006-8-28 32
E & P
Increase oil & gas production
Add capacity in promising areas
Accelerate preparation for Puguang Gas Field development
2H Plan FY2006
Crude oil production (mm tonnes) 20.16 40.00
Natural gas production (bcm) 3.5 7.07
2006-8-28 33
Refining
Diversify crude sourcing to reduce purchasing cost
Proactively adjust product mix
Improve throughput of high value-added products
2H Plan FY2006
Crude throughput (mm tonnes) 73.30 144.98
2006-8-28 34
Marketing
Closely track market trends and align marketing strategy accordingly
Optimize resource allocation to maintain market position
Strengthen management and optimize marketing structure
2H Plan FY2006
Total domestic sales of refined oil products (mm tonnes)
56.00 110.32
2006-8-28 35
Chemicals
2H Plan FY2006
Ethylene production (mm tonnes) 3.03 6.06
Ensure safe and stable operations, and smooth start-up of new facilities
Optimize product mix, increase production of profitable and high-demand products
Leverage functions of chemical sales company
2006-8-28 36
Conclusion
Continue policy of “Reform, Restructuring, Innovation and Development ”
Achieve 2006 production and operations targets
Maintain sound performance
2006-8-28 37
For Further Information
http://www.sinopec.com
Investor Relations
Beijing: Tel: (8610) 64990060 Fax: (8610) 64990489Email: [email protected]
Hong Kong: Tel: (852) 28242638 Fax: (852) 28243669Email: [email protected]
New York: Tel: (212) 759 5085 Fax: (212) 759 6882Email: [email protected]
Media Relations
Tel: (8610) 64990092Fax: (8610) 64990093Email: [email protected]