Turnover increases by 14.42%; Pre-tax interim profit sets new high
HONG KONG, Aug. 26 /Xinhua-PRNewswire/ -- 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 six-month period ended June 30, 2007 (the
"Period"). Under the International Financial Reporting Standards,
the Group's turnover was RMB26,820.2 million, up 14.42% on a
year-on-year basis. Profit before taxation was RMB2,469.1 million,
representing a 45.85-fold increase on a year-on-year basis which
was the best ever for the corresponding period in the Company's
history. Meanwhile, profit after taxation and minority interests
rose from RMB1,779.9 million to RMB1,785.6 million; and basic
earnings per share was RMB0.248 (2006 interim: RMB0.001). The board
of directors did not recommend any interim dividend for 2007 (2006
interim: Nil). Mr. Rong Guangdao, Chairman of Shanghai
Petrochemical, said, "In the first half of 2007, in light of the
unfavorable conditions resulting from sustained high volatility of
international crude oil prices, surging prices of raw materials and
intensifying market competition, the Group implemented a low- cost
strategy as its main course of action while focusing on improving
economic efficiency, striving to reduce costs and charges. As such,
the turnover increased by approximately RMB 3,400 million when
compared to the same period in 2006. Profit before taxation set a
new high. In addition, the Group maintained stable operations and
production during the first half of 2007 . The number of
unscheduled suspensions for major production facilities decreased
by 7.14% over the corresponding period of the previous year,
whereas the output-to-sales ratio and the receivable recovery ratio
remained at satisfactory levels." In the first half of 2007, the
Group realized net sales of RMB26,468.2 million, up 14.46% from
last year, among which net sales derived from petroleum products,
intermediate petrochemicals and resins and plastics increased by
11.22%, 37.69% and 6.59%, respectively, while net sales of
synthetic fibres reported a 0.42% dip. During the Period, the Group
processed 4,512,700 tons of crude oil, an increase of 1.48% or
65,600 tons on a year-on-year basis. Of the total processed amount,
imported oil and offshore oil amounted to 4,266,100 tons and
246,600 tons, respectively. The output of gasoline decreased by
27.41% to 290,800 tons, while the output of diesel reported a 2.34%
hike to 1,360,200 tons. Production of jet fuel reached 351,500
tons, up 39.15%. The output of ethylene and propylene amounted to
476,500 tons and 248,000 tons, respectively, representing
respective decreases of 0.79% and 5.95%. On the other hand, the
output of synthetic resins and plastics, synthetic fibre monomers
and synthetic fibre polymers amounted to 558,400 tons, 430,700 tons
and 302,400 tons, respectively, recording respective increases of
0.43%, 12.72% and 0.80%. However, the output of synthetic fibres
dropped 4.98% to 162,300 tons. The Group's output-to-sales ratio
and receivable recovery ratio in the first half were 99.15% and
99.24%, respectively. During the Period, the Group's weighted
average cost of crude oil dropped RMB159.02/ton on a year-on-year
basis to RMB3,547.75/ton in the first half of 2007, representing a
4.29% decrease. With the average price of crude oil having dropped
slightly, the Group's total cost of crude oil processed during the
reporting period fell 1.23% on a year-on-year basis to RMB16,001.0
million. The crude oil costs accounted for 65.54% of the Group's
cost of sales in the first half. Construction on the Group's major
projects continued to move forward during the Period. The
380,000-ton/year ethylene glycol project and the 3,300,000-ton/year
diesel hydrogenation project commenced operation on March 3 and
June 18, respectively, with both facilities now operating smoothly.
Other major projects of the Group, which aimed at further adjusting
and optimizing assets and products composition, proceeded smoothly.
For example, the flue-gas desulphurization project, the
620-ton/hour steam boiler, the 100MW power generation project, the
1,200,000-ton/year delayed coking plant and the 600,000-ton/year PX
aromatics complex were all proceeding steadily as scheduled. Some
of these projects are expected to commence operation within the
year. Looking ahead, Mr. Rong Guangdao, said, "In the second half
of 2007, the global supply and demand of crude oil will remain
relatively unbalanced. It is anticipated that crude oil prices will
hover at higher levels or will even set new highs, while the
Company's major production facilities will undergo large- scale
inspection and maintenance. Accordingly, the outlook of production
operation is not optimistic. However, in the second half of 2007,
the Group will continue to accelerate the development of the
structural adjustment program and to push forward technological
renovation programs, thereby striving for the enhancement of the
enterprise's competitiveness. To further improve the Company's
operating efficiency, we will continuously enhance internal
management and reduce costs." Shanghai Petrochemical is one of the
largest petrochemical companies in the PRC and was one of the first
Chinese companies to effect 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 categories. 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. Encl:
Consolidated Income Statement (Unaudited) Sinopec Shanghai
Petrochemical Company Limited 2007 Interim Results (Prepared under
International Financial Reporting Standards) Consolidated Income
Statement (Unaudited) Six-month period ended 30 June 2007 2006
RMB'000 RMB'000 Turnover 26,820,241 23,440,275 Less: Sales taxes
and surcharges (352,076) (316,004) Net sales 26,468,165 23,124,271
Cost of sales (24,413,090) (22,931,817) Gross profit 2,055,075
192,454 Selling and administrative expenses (243,101) (281,013)
Other operating income 476,533 130,536 Other operating expenses:
Employee reduction expenses (50,733) (19,810) Others (64,805)
(42,289) Profit/(loss) from operations 2,172,969 (20,122) Share of
profits of associates and jointly controlled entities 384,912
180,156 Net financing costs (88,757) (107,335) Profit before
taxation 2,469,124 52,699 Taxation (653,094) (11,390) Profit after
taxation 1,816,030 41,309 Attributable to: Equity shareholders of
the Company 1,785,569 5,693 Minority interests 30,461 35,616 Profit
after taxation 1,816,030 41,309 Basic earnings per share RMB0.248
RMB0.001 DATASOURCE: Sinopec Shanghai Petrochemical Company Limited
CONTACT: Ms. Christy Lai or Ms. Patricia Tse, both of Rikes
Communications Limited, for Sinopec Shanghai Petrochemical Company
Limited, +852 2520 2201, or (fax) +852 2520 2241
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