HONG KONG, April 26 /Xinhua-PRNewswire-FirstCall/ -- Sinopec Shanghai Petrochemical Company Limited ('Shanghai Petrochemical' or the 'Company') (HKEx: 338; SSE: 600688; NYSE: SHI) announced today the unaudited operating results of the Company and its subsidiaries (the 'Group') for the three-month period ended March 31, 2006 (the "Period"). In accordance with PRC Accounting Standards, during the Period, the Group's income from principal operations amounted to RMB11,334 million, an increase of 6.41% as compared to the corresponding period of the previous year. Net loss amounted to RMB154 million. Mr. Rong Guangdao, Chairman of Shanghai Petrochemical, said, 'In the first quarter of 2006, international crude oil prices continued to rise substantially, thereby significantly increasing the production costs of the Group. In addition, as the prices of petroleum products were controlled by the State, there was limited room for prices of petroleum products to increase. As such, the gap between the domestic and international prices of petroleum products was rapidly enlarged. The first quarterly results of the Group suffered a loss.' During the Period, the Group's sales of synthetic fibres, resins and plastics, intermediate petrochemicals and petroleum products amounted to RMB1,096 million, RMB3,659 million, RMB1,474 million and RMB4,699 million, respectively. Other than the increase of 29.64% in the weighted average selling price of petroleum products as compared to the corresponding period of the previous year, the weighted average selling prices for synthetic fibres, resins and plastics and intermediate petrochemicals decreased by 4.14%, 2.66% and 12.63%, respectively. During the Period, the Group processed 2,309,900 tons of crude oil (of which 62,800 tons were on sub-contracted basis), representing an increase of 1.42% as compared to the corresponding period of the previous year. The Group's unit cost of crude oil processed amounted to RMB3,678.45 per ton, an increase of 43.15% as compared to the corresponding period of the previous year. Looking ahead, Mr. Rong said, 'As the current international crude oil prices fluctuate at a high level and mechanisms for adjustment of prices of petroleum products have not been implemented in a way which completely reflect the current high crude oil prices, it is estimated that the net profit of the Group for the half year will drop substantially when compared to the previous year. As such, in response to the changing macro-economic conditions and the industry's growth cycle, the Group will further increase operational efficiency, enhance management and accelerate development, with a view to achieving satisfactory operating results for 2006.' Shanghai Petrochemical is one of the largest petrochemical companies in the PRC and was one of the first Chinese companies to make a global securities offering. Located in Jinshan District in the southwest of Shanghai, it is a highly integrated petrochemical complex which processes crude oil into a broad range of synthetic fibres, resins and plastics, intermediate petrochemicals and petroleum products. This press release contains statements of a forward-looking nature. These statements are made under the 'safe harbor' provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "will," "expects," 'anticipates,' 'future,' 'intends,' 'plans,' 'believes,' 'estimates' and similar statements. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that the PRC economy may not grow at the same rate in future periods as it has in the last several years, or at all, including as a result of the PRC government's macro-economic control measures to curb over-heating; uncertainty as to global economic growth in future periods; the risk that prices of the Company's raw materials, particularly crude oil, will continue to increase; not being able to raise its prices accordingly which would adversely affect the Company's profitability; the risk that fluctuations in demand for the Company's products may cause the Company to either over-invest or under-invest in production capacity in one or more of its four major product categories; the risk that investments in new technologies and development cycles may not produce the benefits anticipated by management; the risk that the trading price of the Company's shares may decrease for a variety of reasons, some of which may be beyond the control of management; competition in the Company's existing and potential markets; and other risks outlined in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update this forward-looking information, except as required under applicable law. Sinopec Shanghai Petrochemical Company Limited Consolidated Income Statement (unaudited) (Prepared under PRC Accounting Rules and Regulations) For the three-month periods ended 31 March 2006 2005 RMB'000 RMB'000 Income from principal operations 11,334,091 10,650,504 Less: Cost of sales 10,963,390 8,555,226 Sales taxes and surcharges 159,520 173,600 Profit from principal operations 211,181 1,921,678 Add: Profit from other operations 37,751 36,498 Less: Selling expenses 138,010 104,656 Administrative expenses 285,897 296,081 Financial expenses 42,517 68,299 (Loss) / profit from operations (217,492) 1,489,140 Add: Investment income / (loss) 105,371 (125,417) Non-operating income 9,026 1,256 Less: Non-operating expenses 26,327 55,901 Total (loss) / profit (129,422) 1,309,078 Less: Income tax 8,893 216,469 Minority interests 15,968 17,317 Net (loss) / profit (154,283) 1,075,292 For further information, please contact: Ms. Sally Wong / Ms. Polly Tong Rikes Communications Limited Tel: +852-2520-2201 Fax: +852-2520-2241 DATASOURCE: Sinopec Shanghai Petrochemical Company Limited CONTACT: Ms. Sally Wong or Ms. Polly Tong of Rikes Communications Limited for Sinopec Shanghai Petrochemical, +852-2520 2201, or fax, +852-2520-2241

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