HONG KONG, Aug. 28, 2014 /PRNewswire/ -- Sinopec Shanghai
Petrochemical Company Limited ("Shanghai Petrochemical" or the
"Company") (HKEx: 00338; SSE: 600688; NYSE: SHI) today announced
the unaudited operating results of the Company and its subsidiaries
(the "Group") prepared under International Financial Reporting
Standards ("IFRS") for the six months ended 30 June, 2014 (the "Period").
According to IFRS, turnover for the Group for the Period reached
RMB51,345 million, representing a
decrease of 10.06% year-on-year. The Group recorded loss after
income tax and non-controlling interests of RMB123.6 million (2013 interim: profit after tax
and profit attributable to non-controlling interests of
RMB473.2 million). Basic loss per
share was RMB0.011 (2013 interim:
basic earnings per share amounted to RMB0.044, based on a total number of 10.8 billion
shares). The Board of Directors did not recommend the distribution
of 2014 interim dividend (2013 interim: issuing 3.36 shares for
every 10 shares to all shareholders by the premium of capital fund,
and 1.64 shares for every 10 shares by surplus fund, as well as
distributing cash dividend of RMB0.50
(VAT inclusive) for every 10 shares to all shareholders).
Mr. Wang Zhiqing, Chairman of Shanghai Petrochemical, said, "In
the first half of 2014, the PRC economy gradually stabilised
despite of a slowdown, maintaining stable growth within a
reasonable range and signaling a further slowdown in economic
growth. The PRC petrochemical market was impacted by weakened
growth of market demand and a relatively rapid increase in
production capacity. The petrochemical product market remained
sluggish with further intensifying competition in the industry.
Facing the challenging operating environment, the Group tackled the
challenges head-on to maintain smooth operations of its plants. It
thoroughly implemented system optimisation. The Group also
continued its efforts in technological advancement and digitisation
of information, further strengthening internal corporate management
and cutting its losses by optimising production efficiency."
In the first half of 2014, the Group's net sales reached
RMB46,690.8 million, representing a
decrease of 10.49% year-on-year. Of this, net sales of synthetic
fibres, resins and plastics, intermediate petrochemicals and
petroleum products declined by 11.84%, 13.23%, 29.97% and 9.00%
respectively. Net sales of trading of petrochemical products rose
by 18.21%.
Under challenging economic conditions during the Period, the
Group lowered crude oil processing volume in view of the market
conditions, upstream and downstream material balance and plant
maintenance, which reduced the total volume of goods produced by
12.84% year-on-year. During the Period, the Group processed
7,225,700 tons of crude oil (including 730,900 tons of crude oil
processed on a sub-contract basis), representing a decrease of
6.25% year-on-year. Total production of refined oil products
reached 4,251,200 tons, representing a decrease of 4.45%
year-on-year. Of this, the output of gasoline was 1,514,700 tons,
representing an increase of 9.63% year-on-year; output of diesel
was 2,033,300 tons, representing a decrease of 19.15% year-on-year;
and output of jet fuel was 703,200 tons, representing an increase
of 27.16% year-on-year. The Group produced 404,700 tons of ethylene
and 364,600 tons of paraxylene, representing a decrease of 15.46%
and 20.20% year-on-year respectively. The Group also produced
487,900 tons of synthetic resins and plastic (excluding polyesters
and polyvinyl alcohol), representing a decrease of 11.31%
year-on-year; 361,700 tons of synthetic fibre monomers,
representing a decrease of 19.34% year-on-year; 204,700 tons of
synthetic fibre polymers, representing a decrease 22.70%
year-on-year; and 116,900 tons of synthetic fibres, representing a
decrease of 8.39% year-on-year. The Group's output-to-sales ratio
and receivable recovery ratio were 100.54% and 100.00% respectively
for the Period.
In the first half of 2014, global crude oil maintained the
balance between supply and demand. International crude oil prices
were volatile in an upward trend mainly due to the impact of the
geopolitical situation. The average unit cost of crude oil (for the
Group's own account) was RMB4,866.94
per ton, representing an increase of 0.28% year-on-year. The
Group's cost of crude oil accounted for 68.38% of the total cost of
sales.
During the Period, the Group continually enhanced its management
of process technology for its plants while improving technical and
economic indicators. The first phase of production plant
maintenance for the year, with a focus on residual oil
hydrogenation plants, was completed. The Group continued to tighten
its management of specialised equipment, key units and gear
transmission equipment, as well as anti-corrosion for equipment and
management of heaters. The Group continued to leverage its
competitive strengths in the integration of its refinery and
petrochemical segments. Tapping fully on the high flexibility of
its refinery plants, the Group increased the procurement and
refining volume of low-grade crude oil and increased its focus on
crude oil procurement, which contributed to lower crude oil cost.
Refinery and petrochemical production were also optimised. The
Group further strengthened refined oil product structure by
lowering production of several lower-margin petrochemical products
and boosting production of high-end gasoline. The Group enhanced
the contribution margin tracing of the plants, and suspended
production at some plants in phases while prioritising the
production of more profitable and marketable products in line with
market conditions. Through various innovative financing methods,
the Group successfully implemented various offshore financing
measures such as overseas agency payments and risk participation,
lowering its capital costs. During the Period, China Jinshan
Associated Trading Corporation, the Group's holding subsidiary, has
established the Shanghai Jinshan Trading Corporation. in the
Shanghai Free Trade Pilot Zone to further expand the Group's
trading segment, increase its trading volume, expand its financing
channels, and lower financing costs.
Looking ahead, Mr. Wang Zhiqing said, "In the second half of
2014, the global economy is expected to be slightly improved over
the first half. With reforms and policy adjustments, the PRC
economy is expected to be relatively stable. Given the stable
economy and the rebound in demand in the PRC, the petrochemical
industry is expected to undergo steady and moderate growth.
International oil prices are expected to continue to fluctuate at a
prevailing high level. Facing a challenging market environment, we
will focus on improving the quality and efficiency of our
development, and will continue to focus on safety and environmental
protection as well as stable production. The Group will continue to
consolidate its system optimisation, cost reductions and strict
management, as it strives to seize the opportunities arising from
the favorable market environment and to achieve a turnaround in its
efficiency."
Shanghai Petrochemical is one of the largest petrochemical
companies in China in terms of
sales revenue, and was one of the first Chinese companies to
complete a global securities offering. Located in the Jinshan
District in southwest Shanghai,
the Group is a highly-integrated petrochemicals enterprise which
processes crude oil into a broad range of products such as
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, due to the PRC government's implementation of
macro-economic control measures to curb over-heating of the PRC
economy; 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 Company may
not be able to raise the prices of its products as 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 the 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 the management; the risk of 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
laws.
For the financial tables that
accompany this release, please refer to the following PDF:
http://photos.prnasia.com/prnk/20140828/8521404871
SOURCE Sinopec Shanghai Petrochemical Company Limited