China Petroleum & Chemical Corporation has announced its interim results for the six months ended June 30, 2008.
Under PRC accounting standards for business enterprises, the Company's operating income increased by 30.3% to RMB 734.783 billion in the first half of 2008. Net profit attributable to the equity shareholders of the parent company decreased 73.4% year on year to RMB 9.339 billion.
Under International Financial Reporting Standards (IFRS), the Company's turnover with other operating revenues and income increased by 36.2% year on year to RMB 768.185 billion in the first half of 2008. Profit attributable to shareholders of the Company decreased 77.3% year on year to RMB 8.255 billion. The Board of Directors proposed an interim dividend of RMB 0.03 per share.
In the first half of 2008, confronted with complicated and severe conditions resulting from soaring crude oil prices, tight price controls on oil products in the domestic market and rising prices of chemical products driven by increased raw materials cost, the Company managed to increase oil and gas production, speed up structural adjustments, took a variety of measures to increase the supply of oil products and made efforts to guarantee the domestic market supply of oil products through optimized production and operation activities, improved management, conserving energy and reducing emissions, and realized steady growth in oil and gas production, refinery throughput, sales volume of oil products and the production of major chemical products. In coping with the exceptional snow storms in South China as well as the magnitude 8 earthquake in Wenchuan County in Sichuan Province on 12 May 2008, the Company promptly activated its contingency plan to guarantee the supply of refined oil products in the disaster-stricken areas. The company fully honored its social responsibility by actively donating goods and money to support the rescue work and reconstruction of the disaster-stricken areas.
In the first half of 2008, the Company’s total capital expenditure was RMB 36.536 billion. Among which, capital expenditure for Exploration and Development was RMB 20.981 billion. The newly-built production capacity of crude oil and natural gas was 2.79 million tonnes and 480 million cubic-meters per year respectively. Capital expenditure in Marketing and Distribution was RMB 4.548 billion. Capital expenditure for Corporate and Others amounted to RMB 1.251 billion.
Looking into the second half of 2008, the Company believes that China's economy will maintain growth momentum and that international prices of crude oil will remain high. It also believes that the domestic refining business will still be under pressure and that the demand growth for chemical products may slow down.
In Exploration and Development, the Company will speed up exploration in such key regions as Tahe and northeastern Sichuan, actively tap the potential of existing oil fields, and further improve its recovery rate. In the second half of 2008, the Company plans to produce 21.24 million tonnes of crude oil and 4.2 billion cubic meters of natural gas.
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