HONG KONG, March 27, 2014 /PRNewswire/ --
2013 Annual Results Highlights:
- Sales volume decreased 5.02% year-on-year to 16.28 million
tonnes.
- Turnover declined 15.70% year-on-year to RMB34.722 billion.
- Loss attributable to shareholders of the Company was
RMB476 million.
- By implementing the strategy of "broadening revenue sources and
cutting expenditures, reducing costs and improving efficiency,
reinforcing risk control", the Group kept various financial
indicators, including cash flow from operating activities, current
ratio and capital structure, in good condition.
Sinofert Holdings Limited ("Sinofert" or the "Company") (stock
code: 00297) today announced the annual results of the Company and
its subsidiaries (the "Group") for the twelve months ended
31 December 2013 (the "Period").
During the Period, the overcapacity problems of fertilizer
industry aggravated and the market remained sluggish. Amidst such
adverse operating environment, sales volume of the Group decreased
5.02% year-on-year to 16.28 million tonnes. Turnover declined
15.70% year-on-year to RMB34.722
billion. Gross profit saw a year-on-year decrease of 46.19%
to RMB1.279 billion.
The Company recorded a loss of RMB125
million in 2013 due to lower fertilizer selling prices and
increased logistics costs, which caused a loss of RMB125 million. It was also because the Company
expected that there might not be sufficient taxable profit
available in the future to offset the tax losses carried forward
from previous years which were due to expire, thus reversed
deferred tax assets of RMB351 million
recognized in previous years in accordance with the applicable
accounting principles. Basic loss per shares for 2013 was
RMB0.0678.
Various financial indicators remained at healthy
levels
In the face of difficulties, the Group adhered to the business
strategy of "broadening revenue sources and cutting expenditures,
reducing costs and improving efficiency, reinforcing risk control."
It implemented a series of measures to reinforce "internal risk
control, financial management, centralized procurement, quality
assurance, logistics management, project management and lean
management." With these measures, a number of its financial
indicators, including cash flow from operating activities, current
ratio and capital structure, were maintained in good condition.
Besides, the Group strengthened its market leadership as the
largest fertilizer distributor in China, while maintaining a good strategic
partnership with international potash fertilizer suppliers and
achieving breakthroughs in the development of technologically
advanced products for marketing.
In 2013, the Group achieved turnover of RMB7.465 billion from the sale of potash
fertilizer, representing a decrease of 23.30% year-on-year.
Turnover of nitrogen fertilizer and compound fertilizer was
RMB12.475 billion and RMB5.451 billion, respectively, down 11.83% and
11.91% from a year ago. Turnover of phosphate fertilizer reduced
15.42% year-on-year to RMB7.936
billion. Meanwhile, turnover of feed-grade phosphate grew
15.61% year-on-year to RMB627
million.
As to potash fertilizer business, the Group successfully
concluded the potash supply agreement for the first half of 2014 at
very competitive prices, laying a concrete foundation for its
potash fertilizer operation this year. Furthermore, it strengthened
the channel marketing of agricultural potash so as to increase
customer loyalty. As for nitrogen fertilizer operation, the Group
retained its leading market share in domestic market and forged
closer partnership with key suppliers by entering into annual
strategic cooperation agreements with them. For phosphate
operation, the Group reinforced the management of MAP and DAP
suppliers and took measures to enhance the integration of
production and sales and optimize sales channels in order to
increase its brand influence and customer loyalty. As to compound
fertilizer business, the Group pushed for consolidated management
of its manufacturing enterprises and subsidiaries in five provinces
of Northern China to reduce
channel duplication and enhance their operating efficiency.
Moreover, it continued to improve product mix and hence increased
sales volume through product differentiation. For feed-grade
phosphate business, Sinochem Yunlong increased the utilization rate
of low-grade phosphate mines and adopted diversified logistics and
delivery channels to lower transportation costs, while
strengthening domestic sales force to better serve customers.
Distribution network optimization, capacity expansion and
resources acquisition
During the Period, the Group further optimized its distribution
network to boost profitability, with 240 distribution centers were
optimized last year. As of the end of 2013, the number of
distribution centers was more than 2,000. Meanwhile, the Group
further strengthened its professional team, enhanced the marketing
capability of its sales force and actively expanded its customer
base.
The Group carried out a series of measures to expand the
production capacity of manufacturing enterprises it controlled or
invested, including the use of advanced production technology, lean
management, technological upgrades and innovation. As a result,
their capacity increased to over 12 million tonnes as at the end of
2013.
To capture opportunities arising from the market ebb, the Group
stepped up efforts to identify targets around the world for
resources acquisition. It closely monitored targets with upstream
resources such as coal, natural gas, phosphate mines, and potash
mines both within China and
overseas. Moreover, it has put in place a professional team for
project negotiations.
Drive strategic transformation for sustainable business
development
Looking ahead, Mr. Wang Hong Jun,
Chief Executive Officer of Sinofert, said, "In 2014, the market
imbalance of fertilizer industry will remain evident. Operating
costs are expected to go up due to rising transportation costs.
Nevertheless, with its commitment to securing food safety in the
country, speeding up the development of new agricultural management
system, promoting large-scale agricultural production, and
management modernization, the government will continue to attach
great importance to agricultural development and put in resources
for this sake. The supportive government policy lays a solid
foundation for the sustainable development of domestic fertilizer
sector."
"While reinforcing our competitive edges in trading business,
the Group will exercise stringent risk management, play to full
potential of our distribution network and strive hard to develop
stellar products. In addition, we will increase the proportion of
sales of products for distribution and technologically advanced
products, drive transformation in marketing strategy. In order to
enhance our competitiveness in the business segments we operate,
the Group will carry out various cost reduction and efficiency
enhancement measures and promote technological innovation. While
accelerating the development of existing resources, we will seize
opportunities at the market trough and prudently identify suitable
targets for acquisitions. All these measures enable us to promote
the integration of resources and fertilizer operations, the
integration of fertilizer and chemical operations, the integration
of production and marketing, the integration of product and
services, therefore creating a sustainable development and
operating models for our core fertilizer business. They help us to
realize persistent development and deliver greater investment value
for shareholders."
Background of Sinofert Holdings Limited
Sinofert Holdings Limited is the largest fertilizer distributor,
the largest supplier of imported fertilizers and one of the largest
fertilizer manufacturers in China.
Based on its distribution services, it integrates production,
supply, and sales to achieve synergies between different
operations. The Company produces and distributes nitrogen,
phosphate, potash and compound fertilizers, offering customers the
widest range of fertilizer products. It owns and operates the
country's largest fertilizer distribution and sales network and a
comprehensive agrichemical services system. Moreover, it forges
strategic alliances with major international suppliers for
exclusive distribution of their products in China. As one of China's leading phosphate resource owners, the
Company is also the largest feedstuff phosphate manufacturer in
Asia. Sinofert is a flagship
company of Sinochem Corporation specializing in fertilizer
operations. Sinochem Corporation was established in 1950 and has
been named one of the Fortune Global 500 for 23 consecutive years.
Its ranking in 2013 was 119th.
This press release is distributed by PRChina Limited on behalf
of Sinofert Holdings Limited.
Investor and media enquiries:
David Shiu / Karl Cheung / Henry
Chik
PRChina Limited
Tel: (852) 2522 1838 / 2522 1368 / 2521 2823
Fax: (852) 2521 9955
E-mail: dshiu@prchina.com.hk / kcheung@prchina.com.hk /
hchik@prchina.com.hk
SOURCE Sinofert Holdings Limited