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Information about PT200503286

Published on April 24, 2008

Author: Massimo


Slide1:  China Petroleum & Chemical Corporation Results for the Year Ended December 31, 2004 March 29, 2005 Hong Kong Forward Looking Statement:  Forward Looking Statement 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 proved 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. Agenda:  2004 Performance Highlights and Achievements 2004 Operating Results 2005 Outlook Agenda Slide4:  2004 Performance Highlights and Achievements Slide5:  2003 2004 Total EBIT 38.88 Total EBIT 63.07 Significant Profit Growth EBIT Analysis RMB billion Note: Unless otherwise specified, all the financial data in the presentation are pro-forma data in accordance with IFRS. EBIT Growth in business segments = EBIT of 2004 before deducting asset disposal, impairment losses of fixed assets and severance cost – EBIT of 2003. Refining EBIT Growth Chemicals EBIT Growth E&P EBIT Growth Marketing EBIT Growth Asset Disposal Severance Cost Corporate & Others EBIT Growth Impairment Losses of Fixed Assets EBIT Growth in Business Segments Reduction in EBIT Slide6:  Solid Financial Performance 2004 2003 Change% Debt / Total Capital and EBITDA / Interest Coverage Debt /Total Capital % EBITDA Interest Coverage (X) Stable Growth in Dividend Payout :  Stable Growth in Dividend Payout RMB billion RMB cents / Share Further Internal Reforms:  Further Internal Reforms Further management restructuring and headcount reduction Flattened managerial hierarchies and streamlined management structure Improved efficiency through net headcount reduction of 11,000 in 2004 Internal consolidation to create enterprise value Redemption of Maolian Convertible Bond Privatisation of Beijing Yanhua Specialisation reform in marketing system Established specialised product divisions including asphalt and catalyst companies following successful operation of acrylic fibre and lubricant companies Slide9:  Focus on core business through investment allocation Timely optimised and adjusted capex to strengthen refining and marketing business Asset swap to optimise asset structure Acquired chemical assets, catalyst assets and petrol stations from parent company; divested down hole operation assets Disposal of under-performing assets Disposed of and made provisions for impairment of RMB5.6 billion assets in 2004 to improve asset quality Restructuring and Optimizing Asset Structure Improved Corporate Governance:  Articles of Association and other documents were amended to meet newly promulgated regulatory standards and mitigate operational risks Internal control system was approved by the Board and became effective in 2005 after one-year trial period Transparency continued to improve through fair, timely, and accurate disclosure Euro-money: “Best Petrochemical Company in Asia” Institutional Investors: “Best IR in oil and gas sector” and “Best IR in China (incl. Hong Kong)” in sell-side view Improved Corporate Governance Committed to Social Responsibility and Contribution to a Harmonious Society:  Committed to Social Responsibility and Contribution to a Harmonious Society Committed to social responsibility Implemented HSE system initiatives Prepared to meet new specifications for gasoline and diesel quality Sponsored educational programs and supported re-building in poverty and disaster-stricken areas Promoted corporate image F1 Sinopec Chinese Grand Prix Partnership with Beijing 2008 Olympic Games Set up long-term incentive mechanism to motivate employee’s energy, creativity, and loyalty to the company Vision:  Vision Develop the Company in a practical and scientific approach Proactively and steadily deepen reform to accelerate asset optimization Generate long-term, sustainable growth for shareholders, employees, customers and society 2004 Operating Results:  2004 Operating Results Slide14:  Continued robust economic growth in China Nominal domestic consumption of refined oil products increased by 19.0% Nominal domestic consumption of three major synthetic materials increased by 11%, and ethylene-equivalent consumption grew by 5.8% International crude oil price fluctuated at high level Chemical business was in upward cycle 2004 Market Environment Slide15:  2002 2003 04/03 Change(%) 2004 E&P —Growth in Production and Reserves Slide16:  E&P – Segment Performance International Crude Oil Price EBIT of E&P Segment USD/bbl Crude Oil and Natural Gas Realized Price RMB million Refining – Safe Operation at High Utilization Rate:  Refining – Safe Operation at High Utilization Rate 2002 2003 04/03 Change(%) 2004 Slide18:  Refining — Segment Performance Refining Margin / Cash Operating Cost Refining Segment EBIT USD/bbl RMB million Slide19:  Marketing — Expanded Sales Network, Retail and Distribution 2002 2003 04/03 Change(%) 2004 Slide20:  Marketing – Segment Performance Marketing Segment EBIT RMB million RON 90# Gasoline Guidance Price RMB/Tonne 0# Diesel Guidance Price RMB/Tonne RMB/Tonne Slide21:  Operation data for 2003 in the above table don’t include production from Maoming ethylene. Those for 2004 include production from Maoming ethylene, but don’t include chemical assets acquired from Sinopec group at the end of 2004. Chemicals — Full Capacity to Meet Market Demand 2002 2003 04/03 Change(%) 2004 Chemicals – Segment Performance:  Chemicals – Segment Performance USD/tonne Chemicals Segment EBIT RMB million Ethylene Cash Operating Costs Chemicals Price Spread (1990 ~ Feb.2005) USD/tonne Cost Reduction:  Cost Reduction (RMB million) Slide24:  E&P – RMB21.234 bn to improve reserves profile, and increase proved reserve and production Refining – RMB14.272 bn, newly added primary refining capacity of 8.3 MMt/y; further improved conversion capacity; Zhejiang-Shanghai-Nanjing crude oil pipeline put into operation Chemicals – RMB11.025 bn, newly added ethylene capacity 270 Mt/y; revamping projects of some chemical facilities progressed smoothly Marketing – RMB16.678 bn, construction of refined oil pipeline progressed smoothly; 2,075 gas stations added Corporate and others – RMB1.55 bn for information system, etc Optimized Investment Focus and Accelerated Asset Restructuring (RMB bn) Capex in the Past 4 Years 2004 Capex: RMB64.75 bn New Achievements in R&D and IT Application:  New Achievements in R&D and IT Application New Achievements in core technology and proprietary technology 639 domestic patents and 48 foreign patents were granted Breakthrough in natural gas exploration in marine phase sedimentary structure in southern China Successfully developed a number of E&P, refining and chemical technologies Scope of IT applications continue to expand Comprehensive E&P business management system and Ningbo-Shanghai-Nanjing pipeline information system successfully launched Promote application of petrol IC card Slide26:  Major JV projects progressed smoothly Successful commissioning of Ethylene projects with BP in Shanghai Ethylene project with BASF is in test run stage The coal gasification project with Shell in Hunan is expected to be completed at the end of 2005 Fujian integrated petrochemical project was in preliminary engineering stage Retail JVs with Shell and BP started operations Smooth Progress in JV Projects 2005 Outlook:  2005 Outlook 2005 Market Analysis:  Global economy is expected to experience stable growth Crude oil price is expected to fluctuate at high levels Chemical business is still in the up-cycle Chinese economy is expected to maintain rapid growth, leading to higher consumption of refined oil products and chemicals Market competition will intensify with opening of retail market and reduction in chemical import tariffs 2005 Market Analysis 2005 Production Plan:  2005 Production Plan 2004 05/04 Change(%) 2005 * Operation data for 2004 include production from chemical assets acquired from Sinopec Group at the end of 2004. Production plan for 2005 include production estimates for Shanghai Secco and BASF-YPC Slide30:  E & P: expand high-quality resources; improve reserves profile and increase production Refining: priority will be given to construction of crude pipeline along Yangzi River and 2nd phase of Ningbo-Shanghai-Nanjing pipeline; Accelerate upgrading and expansion of refineries along coastal areas and start construction of Qingdao Refinery Chemical: focus on re-vamping and construction of large-scale ethylene, aromatic and PTA facilities Marketing: further improve sales network; develop pipelines; optimize storage facilities layout; accelerate construction of southwest refined oil products pipeline and install petrol IC card instrument 2005 Capex Plan 2005 Capex Plan: RMB 62.0 billion RMB billion Pave the way for commercial operation of Shanghai Secco and BASF-YPC and expedite the progress of Fujian refining-chemical integrated project Slide31:  Total RMB 2.5 bn 2005 Cost Reduction Plan RMB million Additional 15,000 headcount reduction is expected this year. Conclusion:  Seize opportunities to develop businesses in a practical and scientific approach Priority will be given to safe operations to maintain sound operational momentum and strive for volume growth Continue to deepen reforms Continue structure adjustment, focus on asset quality, efficiency and returns Conclusion Achieve sustainable and effective development For Further Information: For Further Information Investor Inquiries Beijing: Tel: (8610) 64990060 Fax: (8610) 64990489 Email: Hong Kong: Tel: (852) 28242638 Fax: (852) 28243669 Email: New York: Tel: (212) 759 5085 Fax: (212) 759 6882 Email: Media Inquires Tel: (8610) 64990092 Fax: (8610) 64990093 Email:

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