Sinopec Kantons Holdings Limited (“Sinopec Kantons” or the “Company”; stock code: 0934) today announcedthe unaudited interim results of the Company and its subsidiaries (collectivelyknown as the “Group”) for the six months ended 30 June 2023 (the “ReportingPeriod”).

In the first halfof 2023, the Group strived to explore development opportunities to furtherexpand the scale of its operations and promote sustainable development. Revenuefor the period slightly decreased by 4.62% year-on-year to approximately HK$309million. Underpinned by remarkable improvement in the results of its jointventures and associates, profit attributable to equity holders of the Companysurged 108.54% year-on-year to HK$744 million. Taking into account the Group’s cashflow and the needs of its future development, the Board announced to distributean interim cash dividend for 2023 of HK10 cents per share, representing a 25% year-on-yearincrease.

Summary of Financial Data:

In the first halfof 2023, the world economy remained challenging. The crude oil price spiraled downwardsand the market was clouded by various unstable, uncertain and unpredictablefactors. Meanwhile, domestic demand recovered as the Chinese economy stabilizedand revived along with the improvement in overall economic situation. The Groupproactively responded to different changes in the business environment, tackledwith difficulties so as to maintainstable production and operations. The Board adhered to its establisheddevelopment strategy, further refined the management and strengthened the riskcontrol.

During theReporting Period, the segment results of crude oil jetty and storage businesssoared by 68.52% year-on-year to approximately HK$607 million. The segmentresults of vessel chartering and logistics business were approximately HK$64.65million, up 15.59% year-on-year.

Stringent risk control and efforts to secure orderlyproduction and operation: Huade Petrochemical Co., Ltd. (“Huade Petrochemical”) in Huizhou Daya Bay, a wholly-owned subsidiary of the Company, maintained itsproduction and operation in an orderly manner, optimized tanker docking andunloading, reduced lag time, lowered its energy consumption and enhanced itslevel of efficiency creation while strictly controlling safety risks. Duringthe Reporting Period, Huade Petrochemical unloaded approximately 5.98 milliontonnes of crude oil from 44 oil tankers, down approximately 6.85% year-on-year.It transmitted approximately 5.79 million tonnes of crude oil, representingapproximately 0.17% year-on-year increase. With additional depreciation chargearising from the new submarine pipelines acquired in late 2022 and depreciationof Renminbi against Hong Kong dollar, the segment revenue from HuadePetrochemical decreased by 4.62% year-on-year to approximately HK$309 million;the segment results dropped by 11.37% to approximately HK$138 million.

Overcame challenges with stable business and operationdevelopment: In the face of volatile market during the Reporting Period, the Six Domestic Terminal Companies under the Companyovercame various difficulties and made every effort to compete for sources ofgoods. They promoted the new mode of business development; and strengthenedrisk prevention and control and compliance management to ensure continualstable operation. In the first half of 2023, the aggregate throughput of theSix Domestic Terminal Companies was approximately 105 million tonnes, downapproximately 4.55% year-on-year, generated a total investment return ofapproximately HK$410 million for the Company, down approximately 11.06%year-on-year mainly due to the overhaul of some refineries, regulatory controland the depreciation of Renminbi against Hong Kong dollar. .

Intensified market development efforts along withinitial results from cost reduction and efficiency enhancement measures: The global oilstorage market has undergone major changes. Vesta further intensified itsmarket development efforts, leading to the improvement in both of its tankoccupancy rate and average rental levels. In addition, the cost reduction andefficiency enhancement measures previously introduced produced initial results,leading to the improvement in its overall operating results. Vesta generated aninvestment return of approximately HK$10.10 million for the Company in theReporting Period, as compared to an investment loss of approximately HK$287million in the same period of 2022.

Active optimization and adjustment of market strategy withenhanced business capabilities: Fujairah Oil Terminal FZC (“FOT”), a joint venture ofthe Company in the Middle East, seized the favourable market opportunity in thefirst half of this year, actively optimized and adjusted its market strategy.While achieving 100% occupancy rate, FOT has been pushing up rental rate levelcontinuously. In addition, FOT accelerated the construction of a pipelinenetwork connecting its storage area to the very large crude carrier (“VLCC”)terminal at the port to enhance FOT’s business capabilities. In the first halfof 2023, FOT generated an investment return of approximately HK$49.79 millionfor the Company, up approximately 57.66% year-on-year.

Steady development of LNG operation: In the first halfof 2023, the Group’s liquefied natural gas (“LNG”) vessel logistics businesscontinued to maintain steady operation and achieved better economic results. Inthe first half of 2023, the eight LNG vessels completed a total of 45 voyagesand generated an investment return of approximately HK$64.65 million for theCompany, up approximately 15.59% year-on-year.

Progress in business expansion: Huade Petrochemical will providenaphtha unloading services to third party, which is expected to boost thebusiness volume in order to bring substantial returns and enhance segmentresults. In addition, Kantons International Investment Limited, a wholly-ownedsubsidiary of the Company intended to make further capital injection on a prorata basis into China Energy Shipping Investment Co., Ltd. Proceeds from thecapital injection is intended to be used for the design, construction, purchaseand operation of three LNG vessels, to expand the Group’s vessel chartering andlogistics business, strengthen the Group’s core competitiveness in the LNGtransportation business segment.

Future outlook: Looking ahead to the second half of 2023, the outlook domesticeconomy is positive, but the external environment will still remain highlyuncertain, the overall recovery of the world economy remained to be severe. TheBoard will earnestly adhere to the high-quality development principle, carryout precise analysis and scientific planning, actively cope with various typesof risks, strive to expand its core business, and explore its businesstransformation so as to achieve the annual production and operation targets andcreate value for shareholders of the Company on a sustainable basis.