China Petroleum & Chemical Corporation 2007 Annual Results Announcement April 7, 2008 Hong Kong
Dec 30, 2015
China Petroleum & Chemical Corporation
2007 Annual Results Announcement
April 7, 2008Hong Kong
2008-4-7 2
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.
2008-4-7 3
Agenda
2007 Overview
2007 Operational Results
2008 Operational Plan
2007 Overview
2008-4-7 5
Profit Growth
RMB million 2005 2006 200707/06
Change
Turnover, other revenues and other income 826,825 1,066,902 1,209,706 13.4%
EBITDA 99,124 114,186 129,179 13.1%
EBIT 67,977 80,632 85,864 6.5%
Net profit attributable to shareholders of the Company
41,354 53,603 56,533 5.5%
EPS (RMB) 0.477 0.618 0.652 5.5%
2008-4-7 6
Financial Position
RMB million 31 Dec. 2005 31 Dec. 2006 31 Dec. 2007
Short-term debts 42,339 44,654 56,467
Long-term debts 63,630 61,617 83,134
Equity attributable to shareholders of the Company
226,099 264,334 307,433
RMB million 2005 2006 2007
Net cash flow from operating activities 78,663 92,507 119,594
Net cash flow from in investing activities (78,113) (103,385) (113,587)
Net cash flow from financing activities (4,257) 2,878 (5,310)
2008-4-7 7
12.0%12.8%12.0%
0%
5%
10%
15%
2005 2006 2007
Financial Position (Continued)
ROCEDebt/equity and
EBITDA/interest coverage
16.1
17.7
17.328.13
27.57
31.38
10.0
11.0
12.0
13.0
14.0
15.0
16.0
17.0
18.0
19.0
20.0
2005 2006 2007
10.00
15.00
20.00
25.00
30.00
35.00
EBITDA/interest coverage Debt/equity
EBITDA/interest coverage
Debt/equity(%)
2008-4-7 8
Dividend
0.050.040.04
0.1150.11
0.09
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
0.18
2005 2006 2007
Interim Final
Dividend Per ShareRMB
2008-4-7 9
Cost Reduction
RMB million
3,0602,7812,762
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2005 2006 2007
E&P Refining Marketing Chemicals
2008-4-7 10
Capital Expenditure
E&P: RMB 54.498 billion. Newly added crude oil production capacity was 6.05 million tonnes per year and that of natural gas was 1.66 billion cubic meters per year. Sichuan-East China pipeline project started
Refining: RMB 22.763 billion. Qingdao project progressed smoothly; Oil products quality upgrading projects such as Yanshan project commenced production
Marketing and Distribution: RMB 12.548 billion. Improved refined oil products distribution network through construction, acquisition and renovation of service stations and oil depots; added 753 new stations
Chemicals: RMB 16.184 billion. Major Ethylene projects progressed smoothly.
Corporate and others: RMB 3.289 billion
2007 Capex RMB 109.282 billion
RMB Billion
109.282
83.903
67.253
0
20
40
60
80
100
120
2005 2006 2007
E & P RefiningMarketing ChemicalsCorporate & others 折线图 6
2008-4-7 11
Technological Innovation
Driving corporate development through technological innovation
E&P: New technologies such as enhancing oil recovery rate
Refining: Substantial progress has been made in technologies to process
low-grade crude oil; commercialized technology to produce gasoline and
diesel which meet the National IV emission standard (equivalent to Euro IV
standard)
Chemicals: Developed proprietary technology for 300ktpa polypropylene
R&D in new and alternative energies
Obtained 616 domestic and 61 foreign patents
2008-4-7 12
Social Responsibility
Ensured stable domestic supply of refined oil products
Implemented energy conservation and effluent-reduction measures
Energy intensity decreased by 6.1%
Fresh water consumption decreased by 4.3%
COD in discharged waste water decreased by 5.4%
Philanthropic activities
Donations to support rescue and rebuilding in Southern China area affected by snow storm disaster early 2008
Sponsored “Health Express” campaign
Sponsor of Beijing 2008 Olympics
2007 Operational Results
2008-4-7 14
Review of Market Environment
China’s economy maintained steady and rapid growth
GDP increased by 11.4%
Domestic consumption of refined oil products grew by 6.8%
Domestic ethylene-equivalent consumption grew by 7.8%
International crude oil prices kept increasing and rose dramatically in the 4th quarter
Domestic refined oil product prices still tightly controlled
Chemical product prices remained high
2008-4-7 15
E&P- Operational Summary
2005 2006 200707/06
Change
Crude oil production (mm bbls) 278.82 285.19 291.67 2.3%
Natural gas production (bcf) 221.9 256.5 282.6 10.2%
Lifting cost (RMB/tonne) 488.34 520.44 600.77 15.4%
Newly added proved reserves of crude oil
(mm bbls)306 286 21 (92.7%)
Newly added proved reserves of natural gas (bc
f)140.6 161.5 3,756.7 2,226.1%
31 Dec. 2005
31 Dec. 2006
31 Dec. 2007
07/06Change
Proved reserves of crude oil (mm bbls) 3,294 3,295 3,024 (8.2%)
Proved reserves of natural gas (bcf) 2,951.7 2,856.7 6,330.8 121.6%
Proved reserves of oil and gas (mm boe) 3,786 3,771 4,079 8.2%
2008-4-7 16
E&P- Segment Performance
Realized prices of Crude Oil and Natural Gas EBIT of E&P Segment
Crude OilRMB/tonne
Natural GasRMB/’000 cubic meter
48,334
63,182
48,766
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2005 2006 2007
3,095
2,680
3,195
823794
673
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2005 2006 2007
0
100
200
300
400
500
600
700
800
900
1000
Crude Oil Natural Gas
RMB million
2008-4-7 17
Refining- Operational Summary
2005 2006 200707/06
Change
Refinery throughput (mbbls / day) 2,817.9 2,946.5 3,132.9 6.3%
Gasoline production (mm tonnes) 22.98 23.00 24.69 7.3%
Diesel production (mm tonnes) 54.92 57.86 60.08 3.8%
Kerosene production (mm tonnes) 6.63 6.35 8.32 31.0%
Light chemical feedstock production
(mm tonnes)21.10 22.74 23.47 3.2%
Light yield (%) 74.16 74.75 74.48 (27bps)
Refining yield (%) 93.24 93.47 93.95 48bps
* The above data does not include production from the five refineries acquired from Sinopec Group Company at end of 2007.
2008-4-7 18
Refining- Segment Performance
EBIT of Refining SegmentRefining Margin / Cash
Operating Cost
Refining Margin(RMB/tonne)
(10,452)
(25,710)
(3,695)
-30,000
-25,000
-20,000
-15,000
-10,000
-5,000
0
2005 2006 2007
107
79
(20)
133
115
135
-40
-20
0
20
40
60
80
100
120
2005 2006 2007
0
50
100
150
200
Refining Margin Cash Operating Cost
Cash Operating Cost(RMB/tonne)
RMB million
2008-4-7 19
2005 2006 200707/06
Change
Domestic sales of refined oil products
(mm tonnes)104.56 111.68 119.39 6.9%
Incl. Retail (mm tonnes) 63.52 72.16 76.62 6.2%
Distribution (mm tonnes) 20.38 18.95 20.17 6.4%
Wholesales (mm tonnes) 20.66 20.57 22.60 9.9%
Total number of service stations 29,647 28,801 29,062 0.9%
Incl. Company-operated 27,367 28,001 28,405 1.4%
Franchised 2,280 800 657 (17.9%)
Annualized throughput of company-operated
stations (tonnes/station)2,321 2,577 2,697 4.7%
Marketing- Operational Summary
2008-4-7 20
Marketing- Segment Performance
RON #90 Gasoline Guidance Price
RMB/tonne 2005 2006 2007
Marketing cash
operating cost*118 130 139
10,350
30,234
35,727
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2005 2006 2007
2,0003,000
4,0005,000
6,0007,000
Jan Mar May Jul Sep Nov
2005 2006 2007 2008
2,000
3,000
4,000
5,000
6,000
Jan Mar May Jul Sep Nov
2005 2006 2007 2008 * 2005 and 2006’s figures are adjusted to the same basis as 2007
EBIT of Marketing Segment
#0 Diesel Guidance Price
RMB/Tonne RMB million
RMB/Tonne
2008-4-7 21
Chemicals- Operational Summary
Unit: 1,000 tonnes 2005 2006 200707/06
Change
Ethylene* 5,319 6,163 6,534 6.0%
Synthetic resins* 7,605 8,619 9,660 12.1%
Monomers & polymers for synthetic fibers 6,725 7,242 8,018 10.7%
Synthetic fibers 1,570 1,502 1,417 (5.7%)
Synthetic rubbers 626 668 800 19.8%
Urea 1,780 1,609 1,565 (2.7%)
*Includes 100% production from BASF-YPC and Shanghai-Secco.
2008-4-7 22
Chemicals- Segment Performance
RMB/tonne 2005 2006 2007
Ethylene cash operating cost
1,254 1,282 1,329
13,30614,186 14,458
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2005 2006 20070
200
400
600
800
1,000
1,200
Jan-2002 Jan-2003 Jan-2004 Jan-2005 Jan-2006 Jan-2007 Jan-2008
LDPE-Naphtha PP-Naphtha
Chemicals Price Spread (2002 – Feb. 2008)
USD/tonne
EBIT of Chemicals Segment
RMB million
2008 Operational Plan
2008-4-7 24
Prospect for 2008 China’s economy is expected to maintain rapid growth, which will lead to
steady growth in demand for oil products and petrochemicals
International crude oil prices will remain high, yet refined oil products will still be subject to tight price control in Mainland China
Measures to cope with the challenges Leveraging the Company’s unique strengths in oil and gas exploration and
development, competitive advantages in refining & marketing as well as chemical businesses, well-established global trading networks
Leveraging the advantages of Sinopec Group in engineering services in oil and petrochemical businesses and in its overseas assets
2008-4-7 25
2008 Operation Estimates
2007 Actual 2008 Estimates Change
Crude oil production (mm bbls) 291.67 298.20 2.2%
Natural gas production (bcf) 282.6 317.79 12.5%
Refinery throughput (mm tonnes) 155.59* 174.00 11.8%
Total domestic sales of refined oil products (mm tonnes)
119.39 124.00 3.9%
Ethylene production (mm tonnes)** 653.4 672.0 2.8%
* Does not include production from the five refineries acquired from Sinopec Group Company at end of 2007.
**Includes 100% production from BASF-YPC and Shanghai-Secco.
2008-4-7 26
2008 Capital Expenditure Estimates
Estimated 2008 Capex: RMB121.8 billion
RMB billion
60.1
19.9
13.0
25.7
3.1
E & P Refining
Marketing Chemicals
Corporate and others
E&P: RMB 60.1 billion. Mainly focus on Sichuan-East China Gas Project and development of Tahe, Shengli and Ordos.
Refining: RMB 19.9 billion. Qingdao Refinery Project to be completed in 2008, Further progress in refined oil products quality upgrading projects.
Marketing and Distribution: RMB 13.0 billion. Improve marketing networks through construction and acquisitions of service stations along expressways and in strategic areas.
Chemicals: RMB 25.7 billion for major ethylene projects.
Corporate and others: RMB 3.1 billion.
2008-4-7 27
For Further Information
http://www.sinopec.com
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