China Petroleum Chemical Corporation 1H 2007 Results

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China Petroleum  Chemical Corporation  1H 2007 Results Powered By Docstoc
					   China Petroleum & Chemical Corporation

1H 2007 Results Announcement


                         August 27, 2007
                            Hong Kong
             Disclaimer

         This presentation and the presentation materials distributed herein 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, market shares, 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.




2007-08-27                                                                                       2
             Agenda




  1H 2007 Overview
  1H 2007 Operational Results
  2H 2007 Operational Plan




2007-08-27                       3
1H 2007 Overview
                 Review of Market Environment

       China’s economy maintained steady and rapid growth, GDP
        increased by 11.5%
                Domestic consumption of refined oil products grew by 4.2%
                Domestic ethylene-equivalent consumption grew by 8.4%

       International crude prices first declined and rose later

       Chemical product prices remained high

       Domestic refined oil products prices still tightly controlled




2007-08-27                                                                   5
             Operational Overview

                                                      1H 2007    1H 2006   Change%

Crude oil production (mm bbls)                          143.88    140.89       2.12

Natural gas production (bcf)                            139.55    126.20      10.58

Refinery throughput (mm tonnes)                          76.25     71.68       6.38

Domestic sales of refined oil products
                                                         57.92     54.32       6.63
  (mm tonnes)

  Incl. Retail (mm tonnes)                               36.01     34.74       3.66

Ethylene production* (1,000 tonnes)                      3,273     3,031       7.98




*Includes 100% production from YPC-BASF and Shanghai-Secco.



2007-08-27                                                                            6
              Profit Growth

RMB million                                  1H 2007   1H 2006   Change%

Turnover and other revenues                  566,830   491,221      15.39

EBITDA                                        72,599    50,437      43.94

EBIT                                          53,346    34,389      55.13

Net profit attributable to shareholders of
  the Company                                 36,190    21,870      65.48


EPS (RMB)                                      0.417     0.252      65.48




2007-08-27                                                                  7
              Financial Position

RMB million                                                   1H 2007              1H 2006

Net cash flow from operating activities                        61,636               19,069

Net cash flow used in investing activities                    (46,316)             (56,181)
Net cash flow (used in)/ generated from financing
                                                              (12,306)              32,532
  activities




RMB million                                         As of 30 Jun. 2007   As of 31 Dec. 2006

Short-term debts                                               47,036               52,824

Long-term debts                                                70,592               61,617
Equity attributable to shareholders of the
                                                              289,614              262,845
  Company




2007-08-27                                                                                    8
              ROCE and Dividend

                            ROCE                                 Dividend Per Share
                                                      RMB Yuan
  15%                                                 0.16
                                                                                   0.11
              12.2%           13.1%
  13%                                                 0.14
                                                                 0.09
                                                      0.12
  10%
                                            8.3%      0.10
    8%                                                0.08

                                                      0.06
    5%
                                                      0.04
    3%                                                                                                   0.05
                                                      0.02              0.04              0.04

    0%                                                0.00
                2005            2006        1H 2007              2005              2006            1H 2007


                                                                         Interim           Final
 Note: ROCE for 1H 2007 is not annualized


2007-08-27                                                                                                      9
1H 2007 Operational Results
              E&P-Operational Summary

                                                     1H 2007    1H 2006   Change%

Crude oil production (mm bbls)                        143.88     140.89       2.12

Natural gas production (bcf)                          139.55      126.2      10.58

Lifting cost (RMB/tonne)                                550        487       12.94

Newly added proved reserves of crude oil (mm bbls)    147.88     143.89       2.77

Newly added proved reserves of natural gas (bcf)      158.63      175.5      (9.61)


                                                      Jun 30.   Dec 31.
                                                                          Change%
                                                        2007      2006

Proved reserves of crude oil (mm bbls)                  3,299     3,295       0.12

Proved reserves of natural gas (bcf)                  2,875.8    2856.7       0.67

Proved reserves of oil and gas (mm boe)               3,778.3   3,771.1       0.19


 2007-08-27                                                                          11
              E&P-Segment Performance

         Crude Oil and Natural Gas                                EBIT of E&P Segment
              Realized price

  Crude Oil                     Natural Gas         RMB million
 RMB/tonne                   RMB/’000 cubic meter
4,000                                  900          40,000
                             800                                   34,533
3,500             748                  800          35,000

3,000                                  700          30,000
                                       600                                       22,750
2,500                                               25,000
                                       500
2,000                                               20,000
                                       400
               3,310
1,500                      2,792                    15,000
                                       300
1,000                                               10,000
                                       200
 500                                   100           5,000

    0                                  0                0
              1H 2006     1H 2007                                 1H 2006       1H 2007
              Crude Oil      Natural Gas
2007-08-27                                                                                12
               Refining-Operational Summary


                                      1H 2007   1H 2006   Change%
Refinery throughput (mm tonnes)         76.25     71.68       6.38

Gasoline production (mm tonnes)         12.16     11.23       8.28

Diesel production (mm tonnes)           28.92     28.32       2.12

Kerosene production (mm tonnes)          4.10      3.18      28.93
Light chemical feedstock production
                                        12.09     11.47       5.41
  (mm tonnes)
Light yield (%)                         74.49     74.81    (32bps)

Refining yield (%)                      93.70     93.73     (3bps)




  2007-08-27                                                     13
                  Refining-Segment Performance

                 Refining Margin /
                                                            EBIT of Refining Segment
                Cash Operating Cost
Refining Margin                  Cash Operating Cost    RMB million
 (RMB/tonne)                        (RMB/tonne)
                              140                      10,000
    300                                     150
                  118           260                                               5,492
    250
                                            100         5,000
    200
    150                                     50              0
    100
                                            0           -5,000
     50
      0                                     -50        -10,000
    -50
                                            -100       -15,000
   -100             (93)
   -150                                     -150                      (16,626)
                                                       -20,000
                  1H 2006    1H 2007                                  1H 2006    1H 2007
          Refining Margin    Cash Operating Cost

   2007-08-27                                                                              14
               Marketing-Operational Summary

                                                     1H 2007   1H 2006   Change%

Domestic sales of refined oil product (mm tonnes)      57.92     54.32       6.63

  Incl. Retail (mm tonnes)                             36.01     34.74       3.66

       Distribution (mm tonnes)                        10.15      9.69       4.75

Total number of service stations                      28,898    29,198      (1.03)

  Incl. Company-operated                              28,153    27,628       1.90

        Franchised                                      745      1,570     (52.55)

Annualized throughput of company-operated stations
                                                       2,558     2,515       1.71
  (tonnes/station)




  2007-08-27                                                                         15
                 Marketing-Segment Performance

   RON #90 Gasoline Guidance Price                      EBIT of Marketing Segment
RMB/Tonne
 6,000                                                RMB million
5,000                                                18,000                         16,795
4,000                                                16,000
3,000                                                14,000
2,000                                                12,000         10,761
        Jan     Mar      May    Jul   Sep      Nov
                                                     10,000
                      2005     2006     2007
                                                      8,000
                                                      6,000
              #0 Diesel Guidance Price
RMB/Tonne                                             4,000
                                                      2,000
6,000
                                                         0
5,000
                                                                    1H 2006         1H 2007
4,000
3,000                                                RMB/tonne                1H 2006   1H 2007
2,000                                                Marketing cash
        Jan     Mar     May     Jul   Sep     Nov
                                                                               149.75    171.80
                                                     operating cost
                      2005     2006    2007
  2007-08-27                                                                                      16
               Chemicals-Operational Summary



Unit: 1,000 tonnes                                            1H 2007   1H 2006   Change%

Ethylene*                                                       3,273     3,031       7.98

Synthetic resin*                                                4,767     4,184      13.93

Monomers & polymers for synthetic fibers                        3,938     3,577      10.09

Synthetic fiber                                                  718       770       (6.75)

Synthetic rubber                                                 360       318       13.21

Urea                                                             813       906      (10.26)




*Includes 100% production from YPC-BASF and Shanghai-Secco.


  2007-08-27                                                                              17
                Chemicals-Segment Performance

    Chemicals Price Spread (2002 – Jul. 2007)                 EBIT of Chemicals Segment

                                                            RMB million
USD/tonne                                                  9,000                              8,542
                                                           8,000
1,000
                                                           7,000           6,176
 900
 800                                                       6,000
 700                                                       5,000
 600                                                       4,000
 500                                                       3,000
 400
                                                           2,000
 300
 200
                                                           1,000
 100                LDPE-Naphtha          PP-Naphtha          0
   0                                                                      1H 2006        1H 2007
   Jan-2002 Jan-2003 Jan-2004 Jan-2005 Jan-2006 Jan-2007
                                                           RMB/tonne                IH 2006      1H 2007
                                                           Ethylene cash
                                                                                     1,262            1,320
                                                           operating cost

   2007-08-27                                                                                                 18
                 Environmental Record
       Energy consumption per unit of production decreased by
        3.95%
                Energy consumption per unit of production for E&P segment decreased
                 by 4.72%
                Energy consumption per unit of production for Refining segment
                 increased by 0.28%
                Energy consumption of ethylene units decreased by 1.02%

       Fresh water consumption and water discharge reduced
        substantially
                Fresh water consumption reduced by 5%
                Wastewater discharge reduced by 7%
                COD in wastewater reduced by 15%



2007-08-27                                                                             19
               Effective Cost Control

                                        1H 2007 Cost Saving

             RMB million
             3,000
                                   2,600
             2,500

             2,000
                                                                  1,484
             1,500

             1,000

               500

                 0
                                 2007 plan                    1H 2007 Actual

                           E&P        Refining    Marketing           Chemicals


2007-08-27                                                                        20
             Capital Expenditure
                                                   E&P: RMB 18.28 billion. Newly added
                                                    production capacity of crude oil was 2.27
                   1H 2007 Capex
                                                    million tonnes per year and that of natural
  RMB million                                       gas was 719 million cubic meters per year,
 120,000         110,060
                                                   Refining: RMB 6.18 billion. Upgrade of
 100,000                                            Yanshan project was completed; Qingdao
                                                    project progressed smoothly; Tianjin-
  80,000                                            Yanshan crude oil pipeline was
                                                    completed.
  60,000
                                  33,746
                                                   Marketing and Distribution: RMB 4.92
  40,000                                            billion. Construction of pipeline for
                                                    refined oil products in Beijing was
  20,000                                            completed; newly added 307 stations.
        0
                                                   Chemicals: RMB 3.30 billion. Tianjin
                2007 plan      1H 2007 Actual       ethylene, Zhenhai ethylene and Fujian
         E&P                  Refining              Ethylene projects progressed smoothly
         Marketing            Chemicals
         Corporate & Others



2007-08-27                                                                                        21
2H 2007 Operational Plan
                 Market Environment for 2H2007

       China’s economy is expected to maintain rapid growth
                Demand for oil products and petrochemicals will increase
                 steadily

       International crude oil prices will remain high

       Refining business will still be under pressure

       Petrochemical product prices will remain at a relative high
        level




2007-08-27                                                                  23
             2H 2007 Operation Estimates

                                                             2H Estimate   FY 2007E

  Crude oil production (mm tonnes)                                 20.74      41.00

  Natural gas production (bcm)                                      4.05       8.00


  Refinery throughput (mm tonnes)                                  78.25     154.50


  Total domestic sales of refined oil products (mm tonnes)         59.08     117.00


  Ethylene production (mm tonnes)                                   3.27       6.54




2007-08-27                                                                            24
             For Further Information




                                 http://www.sinopec.com

Investor Relations                                        Media Relations
Beijing:     Tel: (8610) 64990060 Fax: (8610) 64990489    Tel: (8610) 64990092
             Email: ir@sinopec.com                        Fax: (8610) 64990093
Hong Kong: Tel: (852) 28242638 Fax: (852) 28243669        Email: media@sinopec.com
           Email: ir@sinopechk.com
New York:    Tel: (212) 759 5085 Fax: (212) 759 6882
             Email: fangzq@sinopecusa.com
2007-08-27                                                                           25