HONG KONG, Aug. 23, 2016 /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, 2016 (the "Period").
According to IFRS, turnover for the Group for the Period reached
RMB36,968.5 million, representing a
decrease of 12.24% year-on-year. The Group recorded profit after
income tax and non-controlling shareholder interests of
RMB3,148.6 million, representing an
increase of 77.80% year-on-year. Basic earnings per share amounted
to RMB0.292 (2015 interim: basic
earnings per share of RMB0.164). The
Board of Directors did not recommend the distribution of 2016
interim dividend (2015 interim: Nil).
Mr. Wang Zhiqing, Chairman of Shanghai Petrochemical, said, "In
the first half of 2016, China's
economy faced the complicated domestic and international
environment and the increased downward pressure on its growth.
China accelerated its supply-side
structural reform and supported the start-up business and
innovation, which enabled the economy to achieve an overall steady
development and recorded a GDP growth of 6.7% for the first half of
2016, representing a decrease of 0.3 percentage points as compared
to the same period last year. The petrochemical industry in
China was steady for the first
half of 2016 in general as consumption of major products increased
steadily, profitability of refined oil products improved while
profit from the petrochemical business grew more rapidly. However,
downward pressure affecting the development of the industry
remains. While investment decreased and a new growth driver had yet
to come, the industry was in the process of bottoming out and
regaining confidence. The Group endeavoured to achieve progress in
safety and environmental protection, operation optimization, market
exploration, as well as cost and expenses reduction while facing
the adversity and intensive market competition."
In the first half of 2016, the Group's net sales amounted to
RMB30,782.3 million, representing a
decrease of 12.21% year-on-year. Among which, net sales of
synthetic fibers, resins and plastics, intermediate petrochemical
products and petroleum products declined by 22.17%, 12.10%, 16.30%
and 29.06%, respectively. Net sales from the trading of
petrochemical products increased by 32.00%.
In the first half of 2016, the total production volume of the
Group reached 6,510,500 tons, which representing a year-on-year
decrease of 8.53%. From January to June, the Group processed
7,354,000 tons of crude oil (including 1,316,800 tons of crude oil
processed on a sub-contract basis), which remain the same level
with last year. The production volume of refined oil products
reached 4,437,200 tons, representing a year-on-year increase of
0.56%. Among which, the output of gasoline was 1,562,600 tons,
representing a year-on-year increase of 4.79%; the output of diesel
was 2,038,800 tons, representing a year-on-year decrease of 4.79%;
and the output of jet fuel was 835,800 tons, representing a
year-on-year increase of 7.20%. The Group produced 414,800 tons of
ethylene and 330,800 tons of paraxylene, representing a
year-on-year decrease of 2.05% and 2.96%, respectively. The Group
also produced 527,200 tons of synthetic resins and plastic
(excluding polyesters and polyvinyl alcohol), representing a
year-on-year decrease of 0.88%; 333,300 tons of synthetic fiber
monomers, representing a year-on-year decrease of 21.52%; 217,500
tons of synthetic fiber polymers, representing a year-on-year
decrease of 0.09%; and 110,400 tons of synthetic fibers,
representing a year-on-year decrease of 4.66%. During the Reporting
Period, the output-to-sales ratio and receivable recovery ratio of
the Group were 98.25% and 100.00%, respectively.
In the first half of 2016, the fundamentals of crude oil market
gradually recovered, the global crude oil prices rebounded after
touching the bottom in the beginning of the year and then showed a
rising trend, with fluctuations. The average unit cost of crude oil
processed (for the Group's own account) was RMB1,745.24 per ton, representing a decrease of
34.22% year-on-year. The Group's cost of crude oil accounted for
39.29% of the total cost of sales.
During the Period, the Group thoroughly broke down and
implemented the responsibilities on safe production. The Group
maintained the stable operation of production devices and
strengthened the evaluation on production and operation performance
with all technical and economic indicators effectively improved.
The Group adhered to the dynamic optimization mechanism of "daily
computation of gross profit margin and weekly exploration of plant
potential". Meanwhile, the Group steadily implemented major
emission reduction projects, such as the desulfurization and
denitrification of boilers in thermal power division and the
start-up boiler renovation for the Olefins Division. It also
completed the "Clear Water, Blue Sky" environmental protection
project. In terms of technology development, on top of designing
high-value-added new products and implementing marketing
initiatives, the Group actively endeavored to achieve an
up-to-standard operation of carbon fiber equipment with a
breakthrough in the industrial application of carbon fiber
achieved. The Group developed and manufactured 117,300 tons of new
products, and submitted 26 patent applications and obtained 28
patent authorizations. In addition, the Group actively optimized
the management framework and further enhanced corporate
management.
Looking ahead, Mr. Wang Zhiqing said, "In the second half of
2016, the global economy will be clouded with more uncertainties.
Given low prices for staple commodity, lackluster growth of
advanced economies, weak investment and trading, coupled with the
impact of uncertainties such as geopolitics and Brexit (the
United Kingdom leaving European
Union), the global economy will continue to be in a stage of
profound adjustments and the challenges to an economic recovery
will still be severe. Despite the unchanged fundamental long-term
positive trend of China's economic
development, the downward pressure on the economy will remain
enormous as the structural contradictions in the China's economy will continue to be obvious,
new drivers for economic growth are yet to emerge, and it will take
time to formulate solutions to the overcapacity problem. Facing the
serious structural overcapacity of the petrochemical industry in
China, as well as the reform of
resource tax in China and fees
imposed on pollutants emissions, costs of petrochemical enterprises
will definitely increase. The increasingly stringent safety and
environmental standards of the state and acceleration of oil
products upgrade will also pose tremendous challenges to the
industry. Facing a challenging market environment, the Group's
approach will be more efficiency-oriented and market-oriented to
ensure achievements in various aspects, including safety and
environmental protection, optimization of system, reduction of cost
and expenses, as well as corporate governance, which in turn will
realize a continuous growth of benefits."
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.
- End -
Encl: Condensed Consolidated Income
Statement (Unaudited): http://photos.prnasia.com/prnk/20160823/8521605335
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SOURCE Sinopec Shanghai Petrochemical Company Limited