According to Wind statistics, among the Chinese companies that have released their 2012 annual reports, excluding banks and other financial listed companies, in term of liabilities China National Petroleum Corporation (CNPC) led the other listed companies with a total debt of 988.148 billion yuan (US $158.1 billion), followed by another large oil enterprise China Petrochemical Corporation (Sinopec), of which the total liability amounted to 718.7 billion yuan (US $114.99 billion).
In recent years, with the increasing overseas acquisitions and new projects, capital expenditures increases the account payable and bonds payable of the two oil giants which pushed up the scale of their liabilities. As for China National Petroleum Corporation (CNPC) in 2012 the net gearing ratio rose to a record high of 37%, and scale of liability increased by 80% in last four years.
According to CNPC’s 2012 Annual Report, as of the end of 2012, the total liabilities amounted 988.148 billion yuan, an increase of 18.3% from the end of 2011; Current liabilities reached 574.748 billion yuan (US$ 91.96 billion), an increase of 2.6% from the end of 2011, growth of liabilities was mainly attributable to increased accounts payable, accrued liabilities and short-term borrowings. Non-current liabilities recorded 413.4 billion yuan (US $67.144 billion), an increase of 50.3% from the end of 2011, the growth was mainly attributable to the increase in long-term borrowings.
The annual report also said that last year, the total assets amounted 2.17 trillion yuan (US $347.2 billion), an increase of 13.1% from the end of 2011. Among them, the current assets reached 414.332 billion yuan (US $66.29 billion), an increase of 8.3% from the end of 2011, growth was mainly attributable to an increase in inventory.
Non-current assets recoredb1.75 trillion yuan (US $ 280 billion), an increase of 14.3% from the end of 2011, growth was mainly attributable to increased capital expenditure on property, plant and equipment (including fixed assets, oil and gas assets). With the increase in foreign investment and projects under construction, capital expenditure sees an increase.
A Morgan Stanley report said last year, net profit of China National Petroleum Corporation (CNPC) fell year-on-year by 13% to 115 billion yuan (US $18.4 billion), the lower limit of the market expectations, such profit fall was mainly due to the significant increase in interest expense (66%), and net gearing ratio rose to a record high of 37%, in part due to last year capital expenditure amounted to 352 billion yuan (US $56.32 billion) which was much higher than the original budget of 320 billion yuan (US $51.2 billion), the bank believes no improvement in relate to this will be seen in the short-term because this year the company’s capital expenditure budget is already 355 billion yuan (US $56.8 billion).