Sinopec Kantons Holdings Limited (“Sinopec Kantons” or the “Company”; stock code: 0934) today announced the unaudited interim results of the Company and its subsidiaries (collectively known as the “Group”) for the six months ended 30 June 2024 (the “Reporting period”).
In the first half of 2024, through persistent efforts to enhance the development quality and efficiency, the Group focused on customer and market expansion and maintained stable production and operation. Underpinned by higher revenue arising from the provision of unloading service to third party by Huade Petrochemical for better utilization of surplus terminal capacity, the Group’s revenue for the period rose by 7.29%year-on-year to approximately HK$331 million. The gross profit advanced by 16.17% year-on-year to approximately HK$178 million. On the other hand, the investment returns of domestic oil terminal companies declined due to a decrease of total domestic crude oil imports and the depreciation of Renminbi against Hong Kong Dollar, resulting in a decrease of the Group’s share of results from joint ventures and associates comparing to the same period last year.
Profit attributable to the Company’s equity holders for the Reporting Period reduced by 7.90% year-on-year to approximately HK$685 million. Taking into account the Group’s results, cash flow and the needs of its future development, the Board announced to distribute an interim cash dividend for 2024 of HK10 cents per share, staying the same with the corresponding period in 2023.
In the first half of 2024, the global economy saw a lackluster recovery along with the spill over effects of geopolitical risks. International oil prices fluctuated widely at high levels amid stark market imbalance. Meanwhile, as the Chinese government’s macro-economic policies continued to pay off, external demand gradually picked up and the overall economic situation steadily recovered. During the Reporting Period, the segment results of crude oil jetty and storage business amounted to approximately HK$608 million, staying flat when compared to the same period last year. The segment results of vessel chartering and logistics business were approximately HK$59.42 million, down by 8.10% year-on-year.
Proactively explored market to drive revenue growth: HuadePetrochemical, a wholly-owned subsidiary of the Company, stabilized its operation and strived hard to expand customer base and enhance revenue. With strict control on safety and environmental protection, it optimized crude oil tanker docking and unloading, further reduced costs and increased efficiency. During the Reporting Period, Huade Petrochemical unloaded approximately 7.39 million tonnes of crude oil from 57 oil tankers, up approximately 23.58% year-on-year. It transmitted approximately 5.99 million tonnes of crude oil, representing approximately 3.45% year-on-year increase. The segment revenue from Huade Petrochemical grew by 7.29% year-on-year to approximately HK$ 331 million; the segment results increased by 17.27% to approximately HK$161 million. The naphtha unloading upgrade and transformation project at Mabianzhoujetty facilities progressed smoothly as scheduled. The project is expected togive a boost to the revenue of Huade Petrochemical upon completion.
Vigorous efforts to secure sources of demand outside of the plan to ensure stable and sound operation: Though dragged by a slowdown in domestic demand during the Reporting Period, the Six Domestic Terminal Companies invested by the Company actively competed for the sources of demand outside of the plan so as to ensure their stable and sound operation. In the first half of 2024, the aggregate throughput of the Six Domestic Terminal Companies was approximately 100 million tonnes, down approximately 4.76% year-on-year. Coupled with the depreciation of Renminbi against Hong Kong dollar, the Six Domestic Terminal companies generated a total investment return of approximately HK$363 million for the Company, down 11.46% year-on-year.
FOT results largely improved with VLCC pipeline connecting project close to completion: During the Reporting Period, Fujairah Oil Terminal(“FOT”), a joint venture of the Company in the Middle East, achieved satisfactory operating results by enhancing marketing efforts. While ensuring 100% occupancy of its facilities, it succeeded in further raising the rental rates. FOT contributed an investment return of approximately HK$67.05 million for the Company in the period, up approximately 34.67% year-on-year. Meanwhile,the construction of a pipeline network connecting FOT’s storage area to the very large crude carrier (“VLCC”) terminal at the port is close to completion. Upon the commencement of its operation, the tank turnover will be accelerated along with enhanced operational flexibility, hence enhancing FOT’s profitability.
Vesta enhanced storage competitiveness and promoted green energy transformation: During the Reporting Period, Vesta Terminal B.V.(“Vesta”), a joint venture of the Company in Europe, actively developed the project connecting the new terminal at the port of Antwerp in order to enhance its overall competitiveness. With a view to promoting green energy transformation, Vesta actively promoted green ammonia unloading and storage project with potential customers to facilitate business transformation and asset enhancement. After the disposal of Vesta Terminal Tallinn (“VTT”) in Estonia by Vesta, the loss incurred from VTT reduced. Vesta contributed an investment return of approximately HK$16.17 million for the Company in the Reporting Period, up 60.10% year-on-year.
Steady development of LNG logistics operation: During the Reporting Period, the Group’s liquefied natural gas (“LNG”) vessel logistics business remained stable. The repairs to a LNG vessel with equipment failure at the end of 2023 was completed, and the vessel resumed normal operation in June 2024. During the Reporting Period, the eight LNG vessels completed a total of 49 voyages. Due to the off- hire loss and higher repair costs, the total investment return from LNG vessel logistics business decreased by 8.10% year-on-year to approximately HK$59.42 million.
Striving for business expansion to create sustainable value for shareholders: Looking ahead to the second half of 2024, the growth momentum of global economy will remain subdued. While the external environment will be clouded with various uncertainties, domestic economy is expected to recover on multiple supportive policies. The Board of Directors will remain steadfast in the principle of high-quality development.With joint efforts made by the management and all employees, the Company will actively tackle with various challenges, vigorously expand core businesses, explore business transformation, and strive hard to develop itself into a world-class international petrochemical storage and logistics company, thereby creating sustainable value for the Company’s shareholders.
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About Sinopec Kantons
Sinopec Kantons is the sole red-chip listed subsidiary of ChinaPetroleum & 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 – Zhan Jiang Port Petrochemical, Qingdao Shihua, NingboShihua, Rizhao Shihua and Tianjin Port Shihua. The Company is also engaged in overseas petrochemical storage business, namely Vesta and FOT. The Company also operates 8 LNG vessels through owing two LNG shipping operating entities. Meanwhile, another 3 LNG vessels are under construction.
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.
