Net profit Rises 84.75% to RMB1,683.1 million HONG KONG, April 7,
2008 /Xinhua-PRNewswire/ -- Sinopec Shanghai Petrochemical Company
Limited ("Shanghai Petrochemical" or the "Company") (HKEx:338; SSE:
600688; NYSE: SHI) announced today the audited operating results of
the Company and its subsidiaries (the "Group") prepared under the
International Financial Reporting Standards (the "IFRS") for the
year ended December 31, 2007 (the "Year"). According to IFRS,
turnover of the Group for 2007 amounted to RMB55,328.4 million,
representing an increase of 9.35% as compared to 2006. Profit
before tax was RMB2,151.4 million, an increase of 123.13%
year-on-year. Profit after taxation of the Company was RMB1,683.1
million, an increase of 84.75% year-on- year. Earnings per share
was RMB0.23 (2006: RMB0.12). The board of directors of the Company
has recommended a final dividend of RMB0.09 (inclusive of tax)
(2006: RMB0.04), equivalent to RMB9.00 per American Depositary
Share. Mr. Rong Guangdao, Chairman of Shanghai Petrochemical, said,
"Driven by the relatively fast growth of the domestic economy and a
cyclical peak of the continuing global petrochemical industry boom
in 2007, the petrochemical industry in China was able to overcome
negative impacts such as rising high international crude oil
prices, reversed pricing trend of domestic petroleum products and
fluctuations in the petrochemical product market, thereby attaining
satisfactory results with continued rapid production, economic
expansion and quality improvements. In 2007, the Group fully
adopted a overall cost leadership strategy, maintained a stable
improvement in production and operation, and effectively enhanced
the upstream-downstream business chain structure. The economic
efficiency witnessed a substantial improvement over the previous
year." In 2007, the Group's total net sales increased by 8.69% to
RMB54,254.7 million for the Year, compared to RMB49,918.1 million
in 2006. The weighted average prices (exclusive of tax) of
synthetic fibres, resins and plastics, intermediate petrochemicals
and petroleum products increased by 4.58%, 1.45%, 13.28% and 3.13%,
respectively, as compared to 2006. As to production and operation,
the Group processed 8,938,400 tons of crude oil, generally on par
with the previous year. Production outputs of gasoline, diesel and
jet fuel increased by 5.78% over the previous year. The output of
gasoline was 645,900 tons, down 15.19% from the previous year; the
output of diesel was 2,929,100 tons and the output of jet fuel was
695,700 tons, increasing by 6.82% and 30.33%, respectively,
year-on-year. Due to the overhaul of certain key facilities such as
those related to ethylene, the Group produced 869,400 tons of
ethylene and 455,900 tons of propylene, down 9.46% and 11.94%
respectively from the previous year. The Group also produced
1,019,000 tons of plastic resins and polymers, representing a
decrease of 6.32% over the previous year; 532,400 tons of synthetic
fibre monomers, a decrease of 3.11%; 631,900 tons of synthetic
fibre polymers, an increase of 4.52%; and 307,900 tons of synthetic
fibres, a decrease of 6.69%. In 2007, the Group's output-to-sales
ratio and receivable recovery ratio were 100.07% and 100.04%,
respectively. The Group's total import/export trade revenue
(excluding crude oil imports) was US$1,784 million, up 13.84% from
the previous year. Of the Group's cost of sales, crude oil costs
accounted for RMB34,456.3 million or 65.45% of the Group's annual
cost of sales. The average cost of crude oil processed was
RMB3,865.85 per ton, up 2.26% over the previous year. The crude oil
costs increased by RMB1,148.7 million as compared to 2006. During
the Year, the Group made significant efforts with respect to the
construction of key projects. The 380,000-ton/year ethylene glycol
plant, the 3,300,000-ton/year diesel hydrogenation project and the
1,200,000-ton/year delayed coking plant commenced operation on 3
March, 18 June and 12 December respectively. The project of adding
flue gas desulphurization facilities to the boilers of coal-fired
power plants completed the 168-hour test run in late September. The
620-ton/hour steam-boiler and 100 megawatt power generation project
successfully commenced power generation on 30 December 2007. The
completion and commencement of such projects laid a solid
foundation for the Group's efforts on structural enhancement,
energy conservation and emission reduction. Besides, the Shanghai
Secco 900,000-ton/year ethylene joint- venture project between the
Company, Sinopec Corp. and BP Chemicals East China Investments Ltd.
operated in a normal manner in 2007, whereby 1,003,000 tons of
ethylene were produced during the Year, representing an increase of
25,000 tons over the previous year. Looking forward, Mr. Rong
Guangdao said, "In 2008, petrochemical companies will be exposed to
a number of challenges: high oil prices that is becoming a long
term trend; possible new changes to the business cycle of the
global petrochemical industry; the State's control over prices of
domestic petroleum products that has not been lossened up; the
impact of a tightening monetary policy; the accelerated RMB
appreciation; the export tax rebates, the EU's REACH legislation,
and so forth. In response to the changes in the foreign and
domestic macro-economic environment, the Group will aim for a full
implementation of its overall cost leadership strategy and strive
for the building of a harmonious enterprise. It will further
optimize its resource allocation; enhance the "Three Basics"
management; enhance safety and environmental protection; emphasize
energy conservation and emission reduction; speed up reforms and
developments; further enhance the development of team structure and
develop corporate culture; with a view to continuously increasing
the enterprise's market competitiveness and improving its risk
management, and striving to continue to achieve satisfactory
operating results in 2008." Shanghai Petrochemical is one of the
largest petrochemical companies in China and was one of the first
Chinese companies to complete a global securities offering. Located
in the Jinshan District which is at the southwest of Shanghai, it
is a highly integrated petrochemical enterprise 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 such as: 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, the risk that the PRC government's implementation of
macro-economic control measures to curb over-heating of the PRC
economy may adversely affect the company; 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; the risk of not being able to raise the prices of the
Company's products as is appropriate thus adversely affecting 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. For further information, please contact: Ms.
Christy Lai / Ms. Patricia Tse Rikes Communications Limited Tel:
(852) 2520 2201 Fax: (852) 2520 2241 Sinopec Shanghai Petrochemical
Company Limited 2007 Annual Results (Prepared under International
Financial Reporting Standards) Consolidated Income Statement
(Audited) For the years ended 31 December 2007 2006 RMB'000 RMB'000
Turnover 55,328,384 50,599,485 Sales taxes and surcharges
(1,073,695) (681,362) Net sales 54,254,689 49,918,123 Other income
93,900 282,142 Cost of sales (52,646,516) (49,182,232) Gross profit
1,702,073 1,018,033 Selling and administrative expenses (504,712)
(521,990) Other operating income 216,553 297,394 Other operating
expenses Employee reduction expenses (208,013) (83,603) Others
(313,245) (156,927) Total other operating expenses (521,258)
(240,530) Profit from operations 892,656 552,907 Financial income
82,280 137,997 Financial expenses (260,206) (303,386) Net financing
costs (177,926) (165,389) Investment income 770,725 -- Share of
profits of associates and jointly controlled entities 665,897
576,682 Profit before taxation 2,151,352 964,200 Taxation (468,216)
(53,238) Profit after taxation 1,683,136 910,962 Attributable to:
Equity shareholders of the Company 1,634,080 844,407 Minority
interests 49,056 66,555 Profit after taxation 1,683,136 910,962
Basic earnings per share RMB 0.23 RMB 0.12 Dividends attributable
to the year 648,000 288,000 DATASOURCE: Sinopec Shanghai
Petrochemical Company Limited CONTACT: Ms. Christy Lai or Ms.
Patricia Tse for Rikes Communications Limited at tel:
+852-2520-2201 or fax: +852-2520-2241
Copyright