As sinopec (00386 - HK) yesterday released results, "three barrels of oil" for half a year all results have been released, sinopec to earn nearly 8 billion yuan, to become "three barrels of oil" the most profitable "a bucket". Ideal performance, the main benefit from crude oil prices rebound sharply, to downstream petrochemical product sales price large rise, drive marketing distribution and chemical business profit growth, but the exploration and development of upstream business is still a loss.
In other words, the impact of low oil prices has not yet passed, and the capital expenditure in the first half of the year is also visible. Sinopec's capital expenditure in the first half of this year was nearly $16 billion, up from 13.47 billion in the same period last year, but still a far cry from the 110.2 billion annual plan proposed earlier this year. Dai houliang, vice chairman and President of sinopec, did not explain it, saying only that the overall investment plan would be arranged in return for investment and that investment would increase in the second half of the year.
But when the upstream business is turning around, sinopec's chief financial officer, wang dehua, expects the break-even point to fall from $60 a barrel to $55 a barrel by 2020. And chairman of sinopec yu-pu wang is expected, the current low oil price will become the norm, not for a year or two can be improved, if oil prices "couldn't be high also, but the middle and lower reaches of sinopec's business integration can realize complementary advantages. In the first half of this year, sinopec's refining business reached EBIT298 billion, an increase of 26.7 per cent per year. Marketing and distribution business EBIT increased by 8% per year; The chemical business EBIT is up nearly 35 percent to $16.5 billion a year.
A fierce price war between gas stations in the mainland in the first half of this year has raised concerns about the outlook for the oil market. Dai Houliang said that since last year's mainland open oil imports and exports of refined petroleum products, since the market main body to increase the competition is intense, but in the first half of sinopec's refined oil sales and profitability are increased, that sinopec did not compete on price. Sinopec's total sales volume rose 1.4 percent to 98.55 million tons, while total sales rose 0.8 percent in China, with sales of refined oil products rising 8 percent to 18.03 billion. Oil prices remain depressed and oil companies have to find a way out. On the upstream side, sinopec will continue to enhance the efficient exploration of crude oil, increase efficiency, accelerate the connection of the natural gas pipeline network, and promote the development of the whole industry chain in the downstream market. In addition, through scientific and technological means to improve the structure adjustment of refined oil products to raise the gross margin, the production of high value-added chemical products and so on. In addition, the mainland is further the mix changes, sinopec in mixed business level change and restructuring, earlier this year from sinopec will complete sales business spin-off listed, the market prospect of one hundred billion listed companies will be born again. However, wang yupu revealed that the plan for mixing reform and the approval of the listing will be delayed for this year. The specific time is difficult to determine, but it will eventually be listed. Q: the sales business will be released this year. How is it going? A listed are actively promote sales company, hope that through listing, further deepening the reform of systems and mechanisms to promote development of examination and approval and reform still has A lot of work to do, the goal of 2017 listed or A delay, but eventually to be listed, while Hong Kong is still A more attractive market.
Q: in the first half of this year, dividend payout increased 26.6 percent year on year. Is there any change in the company's future dividend policy?
A dividend policy is not less than 30% of the annual return, and the company will fully consider the short-term and long-term interests of shareholders.
Q: how about the current pipeline business deployment process?
A gas pipeline from the Inner Mongolia ordos to cangzhou in hebei province has been approved. It is currently in the preliminary work of the launch, and the specific timetable will be confirmed when needed. It will be officially started next month. By 2020, the planned capacity for natural gas will reach 40 billion cubic meters by 2020.
Q sinopec has made a big breakthrough in geothermal energy in recent years. How will the business impact the company in the future?
A geothermal energy is A new business for sinopec, which is actively moving forward and communicating with the new development zone. It will also be able to launch the geothermal business when it is large enough.
Q: the four major refining bases will need more than 100 billion investment. Will they be open to social funds?
The investment of the four bases will be different according to different business sectors, and the joint venture or sole proprietorship is possible. In general, it is to build A more competitive integration base.
Q: capital expenditure in the first half of this year is only $16 billion. The annual capital expenditure raised in the first half of this year is still far from the 100 billion yuan. Will there be a big investment in the second half of this year?
The investment plan of A as A whole is arranged according to the investment return, and the investment will be further strengthened in the second half.
Q: is there any further progress in cooperation between Q and Saudi aramco?
A Saudi aramco is currently engaged in global investment and sinopec has no further information to disclose.
Q: what's the progress of Q mixing?
A mixed ownership is not only A source of capital, but the other enterprises are also confused. We will actively promote the reform in different fields according to the regulations of the state.
Q: when can the upstream business be profitable?
The upstream business of the company under A low oil price really is difficult, the upstream business break-even point is $60 A barrel, sinopec's goal is to fell to under $55, 2020 to ensure that can realize basic earnings in 2020.
Q: what is the trend of the oil price in the second half of the year?
A oil is hard to predict, but overall high also, and predict the oil prices are likely to become the norm, is ready to sinopec, sinopec is on the middle and lower reaches of the integration of the interrelated comprehensive companies both at home and abroad, in the case of upstream oil prices lower, refining and marketing business profitability is strong, can achieve complementarity between each other, low oil prices may is A good opportunity for the downstream business profitable.
Q: in the first half of the year, non-oil trading volume rose by more than 50 percent. How to forecast growth in the second half of the year?
Since 2014, the oil business A compound growth rate of over 45%, the business is to further deepen the reform of the systems and mechanisms, think in the second half of the first half of the business will continue strong growth momentum. Currently, the sales company serves more than 20 million consumers per day and has more than 130 million customer resources.
Q: how will sinopec increase its oil reserves in the future?
Improvement of crude oil reserves mainly depends on technical progress and internal deepening reform.
Q: what is sinopec's strategy for overseas assets and will it sell some of its less profitable assets?
A sinopec's overseas assets quality good, the average cost of oil in 42 yuan, has A strong competitive power, for the treatment is poor overseas assets, the purchase to buy good assets, or work with international companies.
Q: in the first half of the year, many gas stations in the mainland were fighting a price war. Is this a short-term phenomenon or a production glut?
A mainland since last open amongs so many brands of crude oil and refined products exportation power, market main body to further diversify the market competition intensifies, but sinopec did not compete on price, but with the brand advantage, network and integration advantages to actively participate in market competition, in the first half of this year sinopec's refined oil sales and profitability are on the rise.
Q: what are the main growth drivers for sinopec in the future?
A sinopec will adopt comprehensive measures, high oil prices on the upstream business is good, the authors ZengLi will also improve the level of corporate profits, it also comes from the science and technology innovation of structural adjustment, such as the quality of the product structure adjustment and development of high value-added chemical products and so on, all can improve the level of profit.