HONG KONG, Oct. 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 nine-month period ended September 30, 2006 (the "Period"). In accordance with PRC Accounting Standards, during the Period, the Group's income from principal operations amounted to RMB37,142 million, an increase of 10.40% as compared to the corresponding period of the previous year. Net loss amounted to RMB60.27 million (2005: Net profit RMB1,749 million). Mr. Rong Guangdao, Chairman of Shanghai Petrochemical, said, "During January to September 2006, although the Group's income from principal operations increased as compared to the corresponding period of the previous year, due to continued upsurge of international crude oil prices, the Group's production costs also increased significantly. In addition, there was limited room for increasing product selling prices, in particular for refined oil products, as prices were controlled by the State, and consequently there was a great discrepancy between selling prices on the domestic and international markets. As a result, the Group's refinery business suffered a serious loss. However, following the two-times price increase on refined oil products, the loss situation for July to September of the Group has been improved." During the Period, the Group's sales of synthetic fibres, resins and plastics, intermediate petrochemicals and petroleum products amounted to RMB3,547 million, RMB11,736 million, RMB4,865 million and RMB15,022 million, respectively. The consolidated average selling prices of the above-mentioned products increased by 2.70%, 7.33%, 0.69% and 16.94%, respectively. During the Period, the Group processed 6,759,500 tons of crude oil (of which 90,100 tons were on sub-contracted basis). With the impact of increased crude oil prices, the Group's unit cost of crude oil processed also increased by 24.57% to RMB3,844.98 per ton. Looking ahead, Mr. Rong said, "Although the loss situation of the Group has been improved, the Group still faces a difficult external environment. The Group will adjust its developing approach in line with such economic changes, focus on optimization and adjustment, improve upon the management philosophy, expedite meticulous management, improve the application of appropriated methodology, and accelerate the pace of reform programs so as to maintain steady development of the Group." Shanghai Petrochemical is one of the largest petrochemical companies in 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 products in 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 be able to raise its prices accordingly which would adversely affect the Company's profitability; the risk that new marketing and sales strategies may not be effective; 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 nine-month periods ended 30 September 2006 2005 RMB'000 RMB'000 Income from principal operations 37,141,952 33,644,463 Less: Cost of sales 35,558,036 29,482,173 Sales taxes and surcharges 500,413 575,959 Profit from principal operations 1,083,503 3,586,331 Add: Profit from other operations 127,384 83,946 Less: Selling expenses 411,742 324,983 Administrative expenses 957,184 895,709 Financial expenses 169,184 147,272 (Loss) / profit from operations (327,223) 2,302,313 Add: Investment income / (losses) 437,320 (1,591) Non-operating income 23,211 55,401 Less: Non-operating expenses 115,294 193,226 Total profit 18,014 2,162,897 Less: Income tax 20,351 360,555 Minority interests 57,937 53,380 Net (loss) / profit (60,274) 1,748,962 For further information, please contact: Ms. Sally Wong / Ms. Christy Lai Rikes Communications Limited Tel: (852) 2520 2201 Fax: (852) 2520 2241 DATASOURCE: Sinopec Shanghai Petrochemical Company Limited CONTACT: Ms. Sally Wong, or Ms. Christy Lai, Rikes Communications Limited, Tel - +852-2520-2201, or Fax - +852-2520-2241, both for Sinopec Shanghai Petrochemical Company Limited

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