Chinese energy giant
PetroChina Company Limited
) announced its third quarter 2012 earnings of RMB 24.9 billion
or RMB 0.14 per diluted share, compared with RMB 37.4 billion or
RMB 0.20 per diluted share in the year-earlier period. Earnings
per ADR came in at $2.22 (exchange rate: US$1.00 = RMB 6.32, 1
ADR = 100 shares).
The decline can be primarily attributable to a challenging
operating environment and persistent refining losses.
However, PetroChina's total revenue for the three months
increased 4.0% from the year-earlier period to RMB 551.6 billion,
driven by higher output.
PetroChina, which last year overtook
Exxon Mobil Corporation
) as the world's biggest listed oil producer, posted strong
upstream output growth during the nine months ended September 30,
2012. Crude oil output rose 2.0% from the year-ago period to
683.2 million barrels (MMBbl), while marketable natural gas
output was up 8.3% to 1,879.3 billion cubic feet (Bcf).
Average realized crude oil price during the first nine months of
2012 was $103.62 per barrel, essentially flat with the
corresponding period of the previous year. Average realized
natural gas price was $5.02 per thousand cubic feet (Mcf), 5.5%
above the year-ago level of $4.76 per Mcf.
This pushed up the upstream (or exploration & production)
segment profit by 1.6% to RMB 163.3 billion.
PetroChina's refinery division processed 743.5 MMBbl during the
nine-month period, up from 725.2 MMBbl in 2011. The company
produced 4.329 million tons of synthetic resin in the period (a
rise of 3.2% year over year), besides manufacturing 2.604 million
tons of ethylene (up 1.7% from the first nine months of 2011). It
also produced 67.135 million tons of gasoline, diesel and
kerosene during the period, as against 64.302 million tons a year
The company's Refining & Chemicals business experienced an
operating loss of RMB 37.4 billion, slightly narrower than the
loss of RMB 38.4 billion in the year-earlier period. The
continued loss in the downstream division was due to PetroChina's
inability to shift the burden of rising oil costs to its
consumers, as state policy requires a lid on domestic refined
In marketing operations, the group sold 113.539 million tons of
gasoline, diesel and kerosene during January - September 2012,
reflecting an increase of 5.9% year over year.
Liquidity & Capital Expenditure
As of September 30, 2012, PetroChina's cash balance was RMB 69.6
billion, while net cash flow from operating activities was RMB
168.0 billion. Capital expenditure for the period reached RMB
189.3 billion, up from the year-ago level of RMB 161.1 billion.
PetroChina is the largest integrated oil company in China. The
firm's activities include: exploration, development, production
and sale of crude oil and natural gas, refining, transportation,
storage and marketing of petroleum products, manufacture and sale
of chemical products, and transmission of natural gas, crude oil
and refined products.
PetroChina is currently a Zacks #3 Rank (Hold) stock, implying
that it is expected to perform in line with the broader U.S.
equity market over the next one to three months.
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