Sinopec Corp Achieved 24% Income Growth in 2008
Year:2009 ISSUE:10
COLUMN:M & A, BUSINESS & TRADE
Click:209    DateTime:Apr.08,2009
Sinopec Corp Achieved 24% Income Growth in 2008     

China Petroleum & Chemical Corporation (Sinopec Corp., HKEX: 386; NYSE: SNP; LSE: SNP; SH: 600028) boosted the operating income and other income by 24.19% year-on-year to RMB1.502 trillion in 2008 in accordance with the International Financial Reporting Standards (IFRS), while the net profit was RMB29.77 billion, down 47.34% from the previous year. EPS was RMB0.343, down 47.34%, according to its annual records posted on March 30th.
   For the fourth quarter of 2008, the company gained RMB305 billion of income and RMB12.05 billion of net profit under PRC accounting standards. EPS was RMB0.14, compared with RMB0.023 in Q4 2007. These figures indicate the company has stronger profit-making ability ever before when given a lower petroleum price.   
   The Exploration and Production Segment generated an operating profit of RMB66.6 billion, an increase of 36.5% year-on-year. Operating income grew 34.9% to RMB196.5 billion. Sinopec Corp. produced 41.8 million tons of crude oil and 8.3 billion cubic meters of natural gas in 2008, an increase of 1.8% and 3.7% respectively over 2007.
   The Refining Segment saw an income increase of 30.4% over the previous year to RMB85.91 billion, but incurred an operating loss of RMB61.5 billion despite government subsidies of RMB40.5 billion, compared with loss of RMB10.4 billion in 2007. The company processed 169 million tons of crude oil in 2008, a year-on-year increase of 4.5%; and produced 105.86 million tons of oil products, up 9.4% over a year earlier, of which 29.09 million tons for gasoline, 68.78 million tons for diesel and 7.99 million tons for kerosene.
   Sinopec Corp. will continue to expand its refining business although the company has postponed some projects including Wuhan ethylene and Yizheng PTA in response to the weaker demand worldwide, according to Mr. Su Shulin, Chairman of Sinopec Corp.
   The company's majority shareholder Sinopec Group has showed interests in overseas oil and gas resources and set the development strategy of acquisitions and joint ventures focusing on Africa and South America markets, Mr. Su Said.
   The Marketing and Distribution Segment generated an operating profit of RMB38.2 billion taking into account the governmental subsidy of RMB9.8 billion, an increase of 6.9% year on year. By the end of 2008, the service stations amounted to 29 279, up 0.7%.
    The company's Chemicals Segment achieved RMB241.1 billion on operating income in 2008, almost the same as the previous year. The increasing consumption of raw and auxiliary materials, plus price hikes of certain items, purchasing and operating expenses increased 11.8%, led to an operating loss of RMB13.1 billion for the business. Sinopec Corp. produced 6.29 million tons of ethylene for 2008, down 3.7%; 9.59 million tons of resins, down 0.7%; 834 thousand tons of synthetic rubbers, up 4.3%; 1.26 million tons of synthetic fibers, down 11.1% and 1.65 million tons of urea, up 5.4%.
    Looking into 2009, Sinopec Corp. plans to produce 42.4 million tons of crude oil and 10 billion cubic meters of natural gas; to process 184 million tons of crude oil and produce 115 million tons of oil products; to sell 125 million tons of oil products in the domestic market; and to manufacture 6.83 million tons of ethylene.
   Sinopec Corp. also posted its preliminary record for the first quarter of 2009 to increase over 50% year-on-year in net profit.