Shanghai Petrochemical Announces 2008 Annual Results
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
International Financial Reporting Standards ( “IFRS”) for the year ended
According to IFRS, turnover of the Group for the Year amounted to a record
high of
the previous year. Loss before taxation was
after taxation attributable to equity shareholders of the Company amounted to
share for 2007:
payment of a final dividend for 2008 (2007:
Mr. Rong Guangdao, Chairman of Shanghai Petrochemical, said, “In 2008,
operating environment amid the hit of the global economic recession: the sharp
rise and fall in international crude oil prices, the long time severely
inverted prices of domestic refined oil products with those of crude oil, the
sudden decrease in demand for petroleum and petrochemical products, the sharp
fall in the prices of petrochemical products and so forth, which resulted in a
remarkable slowdown in petroleum and petrochemical production growth and a
substantial decrease in corporate profitability. Confronted with such tough
situations, the Group continued to fully implement its cost leadership
strategy, improve production operation, optimize resource allocation and push
forward the execution of its reforms and adjustments. Consequently, it was
able to maintain steady production operations as well as make substantial
progress in project construction, scientific research and development and
internal management. With unremitting efforts, the Group broke through
the Group experienced a substantial decrease in economic efficiency as
compared to the previous year due to the impact of the deteriorated external
operating environment and policy-related factors.”
In 2008, the Group’s total net sales increased by 9.35% to
million
derived from petroleum products and intermediate petrochemical products
increased by 30.98% and 9.59%, respectively, while net sales of resins and
plastics as well as synthetic fibres reported decreases of 6.48% and 15.40%,
respectively.
The Group strived to maintain stable production operations on an ongoing
basis. It processed 9,238,300 tons of crude oil, up 3.36% over the previous
year. Production outputs of gasoline, diesel and jet fuel increased by 13.01%
over the previous year. Outputs of gasoline and diesel were 772,900 tons and
3,418,700 tons, respectively, up 19.66% and 16.72% over the previous year,
respectively; and output of jet fuel was 634,700 tons, representing a decrease
of 8.77% over the previous year. The Group produced 885,600 tons of ethylene
and 487,300 tons of propylene, up 1.86% and 6.89% over the previous year,
respectively. The Group also produced 998,600 tons of synthetic resins and
copolymers, representing a decrease of 2% over the previous year; 461,900 tons
of synthetic fibre monomers, 585,500 tons of synthetic fibre polymers and
270,000 tons of synthetic fibres, representing decreases of 13.24%, 7.34% and
12.31% over the previous year, respectively. Meanwhile, the quality of the
Group’s products was consistently maintained at a premium level. The Group’s
output-to-sales ratio and receivable recovery ratio were 100.44% and 100.17%,
respectively.
In 2008, the Group’s crude oil costs amounted to
representing an increase of
accounting for 71.47% of the Group’s annual cost of sales. The average cost
of crude oil processed was
increase of 37.19% over the previous year.
During the Year, the Group continued to commit adequate resources to the
construction of projects relating to the structural adjustment program, which
proceeded steadily and on schedule: simultaneous works commenced on the civil
engineering and installation of a 600,000 ton/year PX aromatics complex, a
150,000 ton/year C5 separation unit, as well as a flue gas desulphurization
project for the coal-fired power generating plants No. 3 and No. 4. A
renovation project for the 220,000-volt substation are being finalized and
scheduled for operation. In addition, the aforesaid projects are scheduled for
basic completion or operation during the first half of 2009.
Looking forward, Mr. Rong Guangdao said, “In 2009, domestic petrochemical
companies are likely to face operational pressure: a contracting market demand;
a switch of the domestic petroleum products market from a seller’s market to a
buyer’s market; capacity surplus due to concurrent commencements of operations
of new plants, resulting in a structured oversupply in the petrochemical
sector; and the ever-intensifying market competition. But at the same time,
we have seen hopes of gradual improvements: the prices of international crude
oil and raw materials will remain lower than those in 2008, thereby
potentially leading to a substantial decrease in corporate costs; the
implementation of an array of initiatives for “ensuring growth and expanding
domestic demand” and the introduction of revitalization program will
effectively drive end-user consumption of petrochemical products and improve
the unfavorable situation in the domestic petrochemical sector; upon
implementation of a reform program for the petroleum product tax regime, the
prices of domestic petroleum products will be indirectly aligned with
international crude oil prices in a controlled manner, which will generally
offset losses on production by oil refining enterprises caused by various
unfavorable policy factors. The Group will turn pressure into motivation and
seize the opportunities; further reinforce basic management; ensure safe,
stable and fine production operations; enhance the standards of energy
conservation and consumption reductions with every effort; reinforce internal
control and management; and continue its efforts on the structural adjustment
projects, thereby striving to return to profit in 2009.”
Shanghai Petrochemical is one of the largest petrochemical companies in
securities offering. Located in the Jinshan District which is at the
southwest of
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.
Please refer to the hyperlink below for the Company’s Consolidated Income
Statement (Audited):
http://www.prnasia.com:80/xprn/sa/attachment/2009/03/20090327-849451.pdf
For further information, please contact:
Ms. Leona Zeng/ Ms. Christy Lai
Rikes Hill & Knowlton Limited
Tel: +852-2520-2201
Fax: +852-2520-2241
SOURCE Sinopec Shanghai Petrochemical Company Limited