China Petroleum & Chemical (386) Q2 2024 earnings summary

Executive summary

• Operating revenue for H1 2024 was RMB1,576.1 billion, down 1.1% year-over-year; net profit attributable to shareholders rose 2.6% to RMB37.1 billion under IFRS, with strong cash flow and a record in oil & gas production.

• Cash generated from operating activities increased 53.4% year-over-year to RMB42.3 billion.

• Interim dividend declared at RMB0.146 per share, with a payout ratio of 49.8% for 2024 and a commitment of at least 65% for the next three years.

• Focused on cost reduction, efficiency, and expanding high value-added products, especially in chemicals.

• Capital expenditures reached RMB55.9 billion in H1 2024, mainly for upstream, refining, marketing, and chemical projects.

Financial highlights

• EBIT rose 3.6% to RMB58,597 million; net profit attributable to shareholders increased 2.6% to RMB37,079 million; basic EPS was RMB0.307, up 2.0% year-over-year.

• Total assets reached RMB2,141.9 billion, up 5.7% from year-end 2023; total equity attributable to shareholders was RMB825.9 billion.

• Liability-to-asset ratio at 54.0% as of June 30, 2024.

• Net cash from operating activities increased to RMB42.3 billion, up RMB14.7 billion year-over-year.

• EBITDA-to-total debt ratio was 0.33; interest coverage ratio was 6.18.

Outlook and guidance

• H2 2024: Domestic demand for natural gas and chemicals expected to improve; refined oil demand to remain stable.

• Plans to process 126 million tonnes of crude oil, produce 6.85 million tonnes of ethylene, and sell 91.09 million tonnes of refined oil products domestically in H2.

• 2H 2024 production plan targets oil & gas output of 252 mmboe, crude oil at 139 mmbbls, and natural gas at 680 bcf.

• Full-year CAPEX planned at RMB117.1 billion for H2, focused on E&P, refining, marketing, and chemicals.

• Commitment to high-quality growth, cost control, and expansion in new energy and high-end materials.