Sinopec Kantons Announces 2022 Annual Results Overall operations remained stable with unchanged dividend payments to reward shareholders

March 23, 2023 by No Comments

EQS Newswire / 23/03/2023 / 22:24 UTC+8

 (23 March 2023, Hong Kong) Sinopec Kantons Holdings Limited (“Sinopec Kantons” or the “Company”; stock code: 0934) today announced the audited annual results of the Company and its subsidiaries (collectively known as the “Group”) for the twelve months ended 31 December 2022 (the “Reporting Period”).

The year 2022 was a very challenging year. The Group proactively responded to them and posted revenue of approximately HK$616 million, slightly down by 3.2% year-on-year. Its gross profit grew by 1.6% year-on-year to approximately HK$288 million. The profit for the year amounted to HK$403 million, representing a 61.6% decrease from a year ago. In order to reward our shareholders for their long-standing support to the Company, the Board recommended the payment of a final dividend of HK12 cents per share after taking into account the Company’s cashflow situation and future business development needs. If the interim dividend of HK8 cents per share is taken into account, the total dividend for the year 2022 is HK20 cents per share, unchanged from the previous year.

Summary of Financial Data:

HK$ ’000 2022 2021 YoY Change
Revenue 616,064 636,517 -3.2%
Gross Profit 287,762 283,264 1.6%
Share of results of Joint Ventures and Associates 712,078 1,083,495 -34.3%
Profit for the Year 402,641 1,049,684 -61.6%
Total Dividend per Share (HK cents) 20 20

During the Reporting Period, the global economy lost steam due to a combination of negative factors, including recurrent outbreaks of COVID-19, intensified geopolitical conflicts and the turbulence in the financial markets caused by successive interest rate hikes of the US, leading to a material adjustment in the pattern of energy supply and demand. In the face of severe and complicated operating situation, the Group effectively coordinated its production and operations, pushed for reform and development, and implemented risk control, thereby ensuring safe and stable production and operation of the Group’s operating entities.

Operations of the Group’s two business segments generally maintained stable in the Reporting Period. However, due to the provision made by the Company for the investment loss arising from long-term equity investment in Vesta Terminal B.V. (“Vesta”), the segment results of the crude oil jetty and storage business were, to some extent, adversely affected. The segment results of oil jetty and storage business reached approximately HK$1.09 billion, up 2.6% year-on-year. The segment results of vessel chartering and logistics business were approximately HK$116 million, up 16.4% year-on-year.

Active market expansion with vigorous efforts to enhance efficiency. The year 2022 marked the second year of the Company’s direct management of the Six Domestic Terminal Companies. In the face of changes in the market and industry environment, the Group adhered to its operational targets, took the board of directors of the subsidiary as the starting point, actively pushed its operating entities to enhance their corporate governance standards and actively explore the market, strived to improve efficiency and continuously strengthened the control of various costs and expenses. In 2022, under the impact of factors such as the pandemic and sluggish demand, the aggregate terminal throughout of the Six Domestic Terminal Companies amounted to approximately 210 million tonnes; and they generated a total investment return of approximately HK$798 million for the Company.

Capture opportunities to boost business scale and profitability. Huade Petrochemical Co., Ltd. (“Huade Petrochemical”) in Huizhou Daya Bay, a wholly-owned subsidiary of the Company, proceeded with lean management, better coordinated the production and operation, and exercised stringent cost control. It seized the opportunity to sign a long-term contract with a third party for the use of port facilities to further enhance the scale of its business and increase profitability in the future. In 2022, Huade Petrochemical unloaded crude oil from 90 tankers with a total volume of approximately 12.37 million tonnes, up 5.8% year-on-year. It transmitted approximately 11.31 million tonnes of crude oil, down 2.9% year-on-year. The segment revenue of approximately HK$616 million was achieved, representing a 3.2% decrease year-on-year. The segment results of Huade Petrochemical surged 109.9% year-on-year to approximately HK$494 million due to a one-off gain on disposal of assets for the exchange of submarine pipelines.

Stepped-up marketing efforts and stringent cost control. In 2022, the operating environment of Vesta storage area in Estonia substantially deteriorated as a result of geopolitical conflicts. The Company made a provision of approximately HK$261 million for the valuation loss due to its interest in Vesta. In order to improve its operating condition, Vesta made changes to its management, strengthened marketing efforts in Estonian storage area, optimized its operating costs, also, made relentless effort to reduce costs and increase efficiency.

Various effective measures to protect interests of the Company and its shareholders. In view of the updated feasibility study for the Batam Island integrated storage and terminal project (“Batam Project”) in Indonesia, the Board of the Company decided not to proceed with the project and made a provision of approximately HK$630 million for the Company’s interest in PT. West Point Terminal because it was economically impractical. The Group will continue to adopt various effective measures actively to protect the legitimate rights and interests of the Company and its shareholders.

Active response to the changing market and relentless efforts to expand market reach. Fujairah Oil Terminal FZC (“FOT”), a joint venture of the Company in the Middle East, actively responded to changes in the market, vigorously expanded its market reach, overcame the adverse effects of a major flooding and quickly resume production. The average occupancy rate of FOT’s facilities in the year reached approximately 99.3%. In addition, construction of a pipeline network connecting the storage area to the very large crude carrier (“VLCC”) terminal at the port continued in the year to enhance FOT’s business capabilities and improve its future revenue and profit. In 2022, FOT generated an investment income of approximately HK$70.38 million for the Company.

Better economic benefits from LNG vessels logistics business. As for the liquefied natural gas (“LNG”) vessel logistics business, the Group overcame the impacts brought by the pandemic in 2022, maintained stable operation and achieved better economic benefits. A total of 102 voyages were completed by the eight LNG vessels during the year. A total of investment return of approximately HK$116 million was generated for the Company, representing a 16.4% year-on-year increase.

Future outlook: Looking ahead to the year 2023, despite various unfavourable situations such as inflationary risks, geopolitical conflicts and a global economic slowdown, the world’s economy is gaining momentum on the relaxation of COVID restrictions around the world and a stabilization and recovery of the Chinese economy. The Group will seize the opportunities and endeavor to achieve its annual production and operation targets, striving to expand core businesses and promote the sustainable and high quality development of the Group.


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 – Zhan Jiang Port Petrochemical, Qingdao Shihua, Ningbo Shihua, 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 joint ventures.

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
PRChina Limited
Mr. David Shiu / Ms. Joanne Liu
Tel: (852) 2522 1838
Fax: (852) 2521 9955

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