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China Petroleum & Chemical Corporation 2008 Annual Results Announcement March 30, 2009 Hong Kong.

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Presentation on theme: "China Petroleum & Chemical Corporation 2008 Annual Results Announcement March 30, 2009 Hong Kong."— Presentation transcript:

1 China Petroleum & Chemical Corporation 2008 Annual Results Announcement March 30, 2009 Hong Kong

2 2009-3-30 Disclaimer 1 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.

3 2009-3-30 Agenda 2008 Overview 2008 Operational Results 2009 Operational Plan 2

4 2008 Overview

5 2009-3-30 4 Review of Market Environment Chinese GDP increased by 9% Crude oil price surged to historical high and then declined sharply Domestic refined oil product prices remained tightly controlled and refining industry suffered severe loss Domestic refined oil product market changed drastically and domestic consumption of refined oil products grew by 10.2% Demand for chemical products declined, and domestic consumption of ethylene-equivalent dropped by 0.3%

6 2009-3-30 5 Operational Summary 200620072008yoy% Crude oil production (mm bbls)285.2291.7296.81.7 Natural gas production (bcf)256.5282.6293.13.7 Refinery throughput (kbpd)3,069.13,253.03399.04.5 Domestic sales of refined oil products (mm tonnes) 111.68119.39122.983.0 Ethylene production * (‘000 tonnes)6,1636,5346,289(3.7) Segment EBIT (RMB million) E&P63,18248,76666,56936.5 Refining(25,710)(10,452)(61,538)N/A Marketing30,23435,72738,2096.9 Chemicals14,45813,306(13,102)N/A Note: * Includes 100% production from BASF-YPC and Shanghai-Secco

7 2009-3-30 6 Financial Performance RMB million200620072008yoy% Turnover, other operating revenues and other income 1,066,9021,209,7061,502,44324.2 EBITDA114,186129,17973,946(42.8) EBIT80,63285,86428,123(67.2) Net profit attributable to equity shareholders of the Company 53,60356,53329,769(47.3) EPS (RMB)0.6180.6520.343(47.3)

8 2009-3-30 Financial Position 7 RMB million31 Dec. 200631 Dec. 200731 Dec. 2008 Short-term debts56,46744,65474,896 Long-term debts61,61783,13490,254 Total equity attributable to equity shareholders of the Company 264,334307,433328,669 Debt/Capital Ratio27.6%28.1%27.9% RMB million200620072008 Net cash generated from operating activities 92,507119,59467,712 Net cash used in investing activities(103,385)(113,587)(110,158) Net cash (used in)/generated from financing activities 2,878(5,310)41,777

9 2009-3-30 Dividend 8 RMB Maintained a relatively stable dividend payout level

10 2009-3-30 9 Capital Expenditure 2008 Capex: RMB107.3 billion RMB billion E&P  Expanded key production facilities and increased reserve utilization  Sichuan-Eastern China Gas Project Refining  Qingdao Refinery Project commenced production  Refining upgrading for processing lower quality crude and producing higher quality products  Caofeidian Crude Oil Jetty Project put into operation Marketing and Distribution  Upgraded the existing service stations  Added 720 new service stations over the year Chemicals  Major ethylene projects progressed smoothly  Some chemical products upgrading projects commenced production

11 2009-3-30 Cost Saving 10 2008 Cost Saving: RMB3.96 billion RMB million 52%

12 2009-3-30 11 Technological Innovation Patents Driving corporate development through technological innovation  E&P: developed technological system such as Puguang gas field development  Refining: commercialized clean fuel technologies such as S-Zorb and diesel desulfurization  Took lead in producing Guo IV spec fuel for cities hosting 2008 Beijing Olympic Games Strengthen R&D in alternative energy Developed a series of new products to meet the market needs

13 2008 Operational Results

14 2009-3-30 E&P - Operational Summary 13 200620072008yoy% Crude oil production (mm bbls) 285.2291.7296.81.7 Natural gas production (bcf) 256.5282.6293.13.7 Lifting cost (RMB/tonne) 5206016304.8 Newly added proved reserves of crude oil (mm bbls) 28621114442.9 Newly added proved reserves of natural gas (bcf) 161.53,756.7921.6(75.5) 31 Dec. 2006 31 Dec. 2007 31 Dec. 2008 yoy% Proved reserves of crude oil (mm bbls) 3,2953,0242,841(6.1) Proved reserves of natural gas (bcf) 2,8576,3316,9599.9 Proved reserves of oil and gas (mm boe) 3,7714,0794,001(1.9)

15 2009-3-30 E&P - Segment Performance 14 RMB million Realized prices of Crude Oil and Natural Gas EBIT of E&P Segment

16 2009-3-30 Refining - Operational Summary 15 200620072008yoy% Refinery throughput (kbpd) 3,069.13,253.03,399.04.5 Gasoline production (mm tonnes) 24.4725.9829.0912.0 Diesel production (mm tonnes)60.1962.4668.7810.1 Kerosene production (mm tonnes)6.358.327.99(4.0) Light chemical feedstock production (mm tonnes) 23.0723.8422.99(3.6) Light yield (%)74.7574.4874.8032bps Refining yield (%)93.4793.9594.0712bps

17 2009-3-30 Refining - Segment Performance 16 RMB million Refining Margin/ Cash Operating Cost EBIT of Refining Segment

18 2009-3-30 Marketing - Operational Summary 17 200620072008yoy% Domestic sales of refined oil products (mm tonnes) 111.68119.39122.983.0 Incl. Retail (mm tonnes) 72.1676.6284.109.8 Distribution (mm tonnes)18.9520.1719.63(2.7) Wholesales (mm tonnes) 20.5722.6019.25(14.8) Total number of service stations 28,80129,06229,2790.7 Incl. Company-operated 28,00128,40528,6470.9 Franchised 800657632(3.8) Annualized throughput of company- operated stations (tonnes/station) 2,5772,6972,9358.8

19 2009-3-30 Marketing - Segment Performance 18 RMB/ tonne 200620072008 Marketing cash operating cost 130139153 RMB million RON #90 Gasoline Guidance Price 0# Diesel Guidance Price EBIT of Marketing Segment Note: The State has adopted maximum retail price since December 2008

20 2009-3-30 Chemicals - Operational Summary 19 Unit: 1,000 tonnes 200620072008yoy% Ethylene 6,1636,5346,289(3.7) Synthetic resins 8,6199,6609,590(0.7) Monomers & polymers for synthetic fibers 7,2428,0187,264(9.4) Synthetic fibers 1,5021,4171,260(11.1) Synthetic rubbers 6688008344.3 Urea 1,6091,5651,6495.4 Note: The above data includes 100% production from BASF-YPC and Shanghai-Secco

21 2009-3-30 Chemicals Price Spread 20 Chemicals - Segment Performance RMB million EBIT of Chemicals Segment RMB/ tonne 200620072008 Ethylene cash operating cost 1,2821,3291,328 USD/tonne

22 2009 Operational Plan

23 2009-3-30 22 Prospect for 2009 Challenges Oil price expected to fluctuate at low level Oil product demand may experience lower growth rate Challenging situation for chemicals business Opportunities New gasoline and diesel pricing policy Chinese government’s stimulus package VAT Reform and moderately easy monetary policies Refining Business Expected to Become Profitable Not to scale

24 2009-3-30 23 2009 Operation Estimates 2009-3 2008 Actual 2009 Estimates Change% Crude oil production (mm bbls)2973011.3 Natural gas production (bcf)29335320.5 Refinery throughput (mm tonnes)*1691848.9 Total domestic sales of refined oil products (mm tonnes) 1231251.6 Ethylene production (mm tonnes) **6296838.6 Note:*Including 100% production from BASF-YPC and Shanghai-Secco

25 2009-3-30 Capital Expenditure Plan 24 2009 Capex Plan: RMB111.8 billion E&P  Start-up of Sichuan-Eastern China Gas Project  Development of oil in Tahe, Shengli, and gas in Puguang and Ordos Refining  Refined oil products quality upgrading projects  Improve logistic system incl. pipeline and storage facilities Marketing and Distribution  Improve marketing networks  Construction and acquisitions of service stations along expressways and in strategic areas Chemicals  Progress in major ethylene projects  Accelerate construction of logistic facilities for chemical products RMB billion

26 2009-3-30 For Further Information Investor Relations Beijing:Tel: (8610) 59960028 Fax: (8610) 59960386 Email: Hong Kong:Tel: (852) 28242638 Fax: (852) 28243669 Email: New York:Tel: (212) 759 5085 Fax: (212) 759 6882 Email: Media Relations Tel: (8610) 59960028 Fax: (8610) 59960386 Email:

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