[Press Release]

(For Immediate Release)

 

 

(Stock Code: 0934)

Operating Results for First Half of 2021 Increased Significantly YOY

******************

To Continue Expanding Core Businesses
by Leveraging on Affluent Financial Resources

 

 (25 August 2021, Hong Kong) Sinopec Kantons Holdings Limited ("Sinopec Kantons" or the "Company", together with its subsidiaries collectively known as the "Group") (stock code: 0934) is pleased to announce its unaudited interim results for the six months ended 30 June 2021 (the "Reporting Period"). The consolidated net profit from continuing operations amounted to approximately HK$674 million, representing an increase of approximately 26.22% year-on-year, translating into earnings per share of HK27.13 cents. The board of directors of the Company declares an interim cash dividend of HK8 cents, which stays the same as the same period last year.

 

Summary of Financial Data and Indicators

HK$ '000	1H 2021	1H 2020	YOY Change
Revenue	330,981	295,938	+11.8%
Gross Profit	166,249	150,465	+10.5%
Share of results of Joint Ventures and Associates	598,389	501,204	+19.4%
Profit from Continuing Operations	674,126	534,069	+26.2%
Net Profit	674,126	609,507	+10.6%

 

HK$ '000	As at 30 June 2021	As at 31 December 2020	Changae
Net Asset	15,087,161	14,715,091	+2.5%
Total Liabilities	775,260	1,299,449	-40.3%
Cash and Cash Equivalents	3,802,033	3,781,081	+0.6%
Liabilities to Assets Ratio(1)	4.9%	8.1%	-3.2 pps

1. Liabilities to Assets Ratio being total liabilities to total assets

 

 

In the first half of 2021, the Group withstood the challenges from both internal and external operating pressures and achieved satisfactory operating results. In the first half of the year, on one hand, the COVID-19 pandemic continued to have a significant impact on the world economy and hampering macro business environment; on the other hand, the Group's former natural gas pipeline transmission business was disposed of while the Group's new businesses are still in developing stage, the Group's operating scale and economic benefits were under considerable downward pressure. In face of the challenges and trials, with its firm confidence and the proactive planning and right leadership of the Board, the Group continued to properly carry out regular epidemic prevention and control to ensure normal production and operation, whilst actively implementing refined management, constantly optimising management and operational plans, and strictly controlling costs and expenses. Meanwhile, the Group strengthened market development and strived to increase total business volume. On such foundation, the Group closely monitored the development trend of clean energy and new business development opportunity, and actively planned for deployment of new projects to secure sustainable development of the Group.

 

Overall Operating Results Increased Steadily Thanks to Continuous Efforts Made in Efficiency Enhancement and Cost Control: In the first half of the year, the Group's revenue from continuing operations was approximately HK$331 million, representing a year-on-year increase of approximately 11.84%, and consolidated net profit from continuing operations was approximately HK$674 million, representing a significant year-on-year increase of approximately 26.22%, translating into earnings per share of approximately HK27.13 cents. The consolidated net profit for the first half of 2021 increased by approximately 10.60% even comparing to the consolidated net profit of the same period last year which included profit contribution from discontinued operation, demonstrating steady growth in its operating results. Taking the cash flow and the needs of the future development of the Company into consideration, the Board decided to maintain the interim cash dividend for 2021 consistent with the same period last year, which is HK8 cents per share for the interim cash dividend for 2021.

 

Efficiency Enhanced in Domestic Terminals Resulting in Significantly Higher Investment Return: During the first half of 2021, Huizhou Daya Bay Huade Petrochemical Company Ltd. ("Huade Petrochemical"), the Company's wholly-owned subsidiary, fully seized the favourable opportunity from the controlled-pandemic in China and the gradual recovery of its economy, and actively carried out regular production and operation, continuously tackled difficulties and enhanced efficiency, focused on long-term development, and continued the in-depth negotiation on future cooperation with Exxon Mobil Corporation on the Huizhou ethylene project in an effort to expand its business scale further and enhance profitability. In the first half of the year, Huade Petrochemical unloaded approximately 6.22 million tonnes of crude oil from 38 oil tankers, representing a year-on-year increase of approximately 0.48%, while it transmitted approximately 6.25 million tonnes of crude oil, representing a year-on-year increase of approximately 5.22%. Benefiting from the appreciation of RMB against HK$, the segment revenue was approximately HK$331 million, representing a year-on-year increase of approximately 11.84%; while the segment results from Huade Petrochemical were approximately HK$148 million, representing a year-on-year increase of approximately 6.94%.

 

In the first half of 2021, the Company officially changed the management approach of Zhan Jiang Port Petrochemical Jetty Co., Ltd. ("Zhan Jiang Port Terminal"), Qingdao Shihua Crude Oil Terminal Co., Ltd. ("Qingdao Shihua"), Ningbo Shihua Crude Oil Terminal Co., Ltd. ("Ningbo Shihua"),  Rizhao Shihua Crude Oil Terminal Co., Ltd. ("Rizhao Shihua"), Tianjin Port Shihua Crude Oil Terminal Co., Ltd. ("Tianjin Shihua") and Tangshan Caofeidian Shihua Crude Oil Terminal Co., Ltd. ("Caofeidian Shihua"), being the associate and joint ventures of the Company (collectively, the "Six Domestic Terminal Companies") from the original entrusted management to direct management, and gave full play to the characteristics of direct management in terms of smoother flow of information and more effective management and control. With an aim of enhancing the profitability of the Six Domestic Terminal Companies, their management system and mechanism reform were strengthened, a series of cost reduction and efficiency enhancement measures were implemented, in an effort to enhance efficiency through management. In the first half of the year, the aggregate throughput of the Six Domestic Terminal Companies was approximately 121 million tonnes, representing a year-on-year decrease of approximately 3.20%, but as benefited from cost control and business optimisation, the aggregate investment return was approximately HK$479 million, representing a year-on-year increase of approximately 17.40%.

 

Overcoming Challenges Brought by Pandemic, Overseas Storage Attained Close to Full Occupancy: In the first half of 2021, Fujairah Oil Terminal FZC ("FOT") in the Middle East, a joint venture of the Company, laid a solid foundation to ensure steady production and operation through sparing no effort in epidemic prevention and control and actively encouraging all employees to receive COVID-19 vaccination. The vaccination rate among the employees was therefore close to 100%. Meanwhile, it accurately grasped market information and actively carried out marketing activities, leading to record highs in the rental of its storage tanks and significantly strengthened profitability. In addition, FOT leveraged on the current accommodative monetary environment to arrange refinancing of its projects to reduce financing costs and ease the pressure of loan repayment. The investment return from FOT in the first half of the year was approximately HK$55.00 million, representing a year-on-year growth of approximately 63.93%. In the first half of 2021, the COVID-19 pandemic resurged from time to time in Europe which posed a considerable challenge to the normal production and operation of Vesta Terminals B.V. ("Vesta") in Europe, a joint venture of the Company. Vesta continued carrying out epidemic prevention and control to maintain stable production and operation while working hard to push forward new project construction to lay the foundation for improving its profitability. In the first half of the year, the average occupancy rate of storage tanks of Vesta was approximately 97.5%, and its investment return was approximately HK$13.26 million, representing a year-on-year increase of approximately 1.61%.

 

Steady LNG Business Delivered Stable Growth in Results: In the first half of 2021, despite the great challenge posed by the COVID-19 pandemic to the operation of vessels, the Group's liquefied natural gas ("LNG") vessel logistics business continued to maintain steady operation under the Group's careful planning and active response. In the first half of the year, the eight LNG vessels completed a total of 54 voyages and generated an investment return of approximately HK$51.04 million, representing a year-on-year increase of approximately 8.57%..

 

Outlook: Looking ahead to the second half of the year, as the COVID-19 vaccination becomes more accessible around the world, it is expected that the pandemic will gradually come under control and the global economy will gradually resume to normal conditions. The Board will earnestly implement new development concepts, strive to enhance production and operation management, and is committed to achieving the annual production and operation targets. At the same time, it will closely monitor the development of clean energy, actively incubate and develop green and low-carbon projects, and seize opportunities to further expand our core businesses, in an effort to achieve sustainable development of the Company.

 

 

-End-

 

 

About Sinopec Kantons

Sinopec Kantons is the sole red-chip listed subsidiary of China Petroleum & Chemical Corporation ("Sinopec", stock code: 0386). It is principally engaged in operating crude oil loading and unloading, storage and transportation facilities and LNG shipping and is committed to becoming "A World-class International Petrochemical Storage & Logistics Company". Currently, Sinopec Kantons holds seven wholly-owned or jointly-held domestic terminal companies, including one wholly-owned subsidiary - Huade Petrochemical Co., Ltd., one 90%-owned joint venture - Caofeidian Shihua, and five 50%-owned joint ventures or associate - Zhanjiang Port Terminal, Ningbo Shihua, Qingdao Shihua, Rizhao Shihua and Tianjin Shihua. The Company is also engaged in overseas petrochemical storage business, namely Vesta and Fujairah Oil Terminal. The company also operates 8 LNG vessels through owing two LNG shipping joint ventures.

 

Disclaimer

This press release includes "forward-looking statements". All statements, other than statements of historical facts that address activities, events or developments that the Group expects or anticipates will or may occur in the future (including but not limited to projections, targets, other estimates and business plans) are forward-looking statements. The Group'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 the price fluctuation, possible changes in actual demand, foreign exchange rate, market shares, competition, environmental risks, possible changes to laws, finance and regulations, conditions of the global economy and financial markets, political risks, possible delay of projects, government approval of projects, cost estimates and other factors beyond the Group's control. In addition, the Group makes the forward-looking statements referred to herein as of today and undertakes no obligation to update these statements.

 

Investor and Media Enquiries:

 

Sinopec Kantons Holdings Limited

Tel: (852) 2508 0228

E-mail: ir@sinopec.com.hk

 

PRChina Limited

Ms. Joanne Liu /Ms. Rachel Xia

Tel: (852) 2522 1838

Fax: (852) 2521 9955

E-mail: sinopeckantons@prchina.com.hk