Shanghai Petrochemical Announces 2011 Annual Results

HONG KONG, March 30, 2012 /PRNewswire-Asia/ -- Sinopec Shanghai Petrochemical Company Limited ("Shanghai Petrochemical" or the "Company") (HKEx: 00338; SSE: 600688; NYSE: SHI) today announced the audited operating results of the Company and its subsidiaries (the "Group") prepared under International Financial Reporting Standards ("IFRS") for the year ended December 31, 2011 (the "Year").

According to IFRS, turnover of the Group for the Year amounted to RMB 95,518.9 million, representing an increase of 23.22% over the previous year. Profit attributable to equity shareholders of the Company amounted to RMB 956.1 million (2010: RMB 2,769.0 million). Basic earnings per share was RMB 0.133 (2010: RMB 0.385). The board of directors of the Company recommended payment of a dividend of RMB 0.50 per 10 shares (including tax) for the Year (2010: RMB 1.00 per 10 shares, including tax).

Mr. Rong Guangdao, chairman of Shanghai Petrochemical, said, "In 2011, China's economy continued to maintain steady and relatively rapid growth while its petroleum and petrochemical industry demonstrated rapid and steady growth. However, the Group's operating costs rose sharply due to the high prices of international crude oil. Meanwhile, domestic prices of refined oil products were kept under control and prices of petrochemical products declined remarkably in the fourth quarter, resulting in a substantial decline in profit for the year compared to last year. Despite the unfavorable macro environment, both the employees and the management managed to seize opportunities when facing challenges in the market, put more effort into optimizing production and operations and carrying out the construction of the Phase 6 Project. As a result, the Group accomplished all of its production and operational tasks for the year and reached record highs in various indicators such as crude oil processing volume, total volume of goods and turnover.

For the year ended December 31, 2011, the Group's net sales amounted to RMB 89,509.7 million, representing an increase of 24.15% over the previous year. The weighted average prices (excluding tax) of the Group's synthetic fibres, resins and plastics, intermediate petrochemical products and petroleum products increased by 8.35%, 12.23%, 17.44% and 18.32%, respectively, over 2010.

In 2011, the Group recorded continuous growth in physical production volume, with the total volume of goods amounting to 12,001,500 tons, representing an increase of 4.53% over the previous year. During the Year, the Group processed 10,866,700 tons of crude oil (including 257,000 tons of crude oil processed on a sub-contract basis), representing an increase of 3.29%. Total production output of gasoline, diesel and jet fuel was 5,745,600 tons, representing an increase of 6.92%, among which the Group produced 968,500 tons of gasoline, 3,979,800 tons of diesel and 797,300 tons of jet fuel, representing increases of 3.87%, 8.27% and 4.13%, respectively. The Group produced 910,100 tons of ethylene and 481,700 tons of propylene, representing a decrease of 6.45% and 7.93%, respectively. The Group produced 923,100 tons of paraxylene, representing an increase of 9.81%. The Group also produced 1,097,900 tons of synthetic resins and copolymers (excluding polyesters and polyvinyl alcohol), representing a decrease of 3.16%; 946,200 tons of synthetic fiber monomers, representing a decrease of 0.41%; 664,200 tons of synthetic fiber polymers, representing an increase of 3.26%; and 250,000 tons of synthetic fiber, representing a decrease of 1.42%. Meanwhile, the Group continued to maintain the premium level of quality of its products.

During the Year, the Group faced a significant rise in operating. In view of the significant increase in the prices of crude oil, which is the main raw material of the Group, the total cost of the Group's crude oil processing amounted to RMB 53,521.9 million for 2011, representing a substantial increase of 34.83% from RMB 39,694.6 million in the previous year. Meanwhile, the domestic prices of refined oil products were not adjusted into line with the prices of crude oil on the international markets in an adequate and timely manner, resulting in losses in the Group's refining business and causing the operating profit of the refining business to decline by RMB 1,593.6 million over the previous year. In addition, the competition in petrochemical products market further intensified since the fourth quarter of 2011, which led to the decline in the prices of petrochemical products and therefore a decline in the profit of the Company's petrochemical business.

In 2011, the Group proceeded with the construction of the Phase 6 Project, including the Refinery Revamping and Expansion Project that is the principal component of the project, making an investment of RMB 3,225.0 million. The Isopentene Plant, with a capacity of 10,000 tons/year, was completed and put into operation. The construction of carbonization and oxidation units of the first stage of the Carbon Fiber Project, with a capacity of 1,500 tons/year, was mechanically completed. In addition, various projects proceeded in an orderly manner as planned, including the Refinery Revamping and Expansion Project (including the construction of a new Residual Oil HydroGenation Plant with a capacity of 3,900,000 tons/year and a new Catalytic Cracking Plant with a capacity of 3,500,000 tons/year, etc.); the Ethanolamine Project, with a capacity of 50,000 tons/year; the Upgrading Project for the optimisation of the system and reduction in energy and feedstock consumption of the No. 2 PTA Plant; and No. 2 and No. 3 Aromatics Complexes Energy-savings Upgrade Project. A feasibility study report on the EVA (Ethylene-Vinyl Acetate Copolymer) Project, with a capacity of 100,000 tons/year, was also submitted. Other key technical renovation projects were implemented as planned, including the Incremental Revamping of the Jinchang Company's Modified Polypropylene Plant, with a capacity of 30,000 tons/year, which was under construction.

Looking forward, Mr. Rong Guangdao said, "In 2012, the world economy will remain complex and challenging and will face increasing instability and uncertainty. China's petroleum and petrochemical industry is facing the pressure from slower economic growth. Pressure on resources, costs, energy conservation and emissions reduction will make the industry's development prospects yet more challenging. However, China's economy is still in an important strategic opportunity period that is full of chances. In the macro environment, in which the State is putting aggressive effort into boosting domestic demand and developing new energy resources and strategic emerging industries, the demand for petrochemical products will remain high and the growth trend will remain stable and relatively fast, which will continue to offer much room for the development of the petroleum and petrochemical industry.

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 in southwest Shanghai, it is a highly integrated petrochemical 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 Chinese 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 Chinese 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 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 the Consolidated Income Statement (Audited), please visit: http://www.prnasia.com/sa/attachment/2012/03/20120330122839289817.pdf

For further information, please contact:

Hill & Knowlton Limited
Ms. Leona Zeng / Ms. Wang Taiyang
Tel: +852-2894-6306 / +852-2894-6207
Email: [email protected] / [email protected]

SOURCE Sinopec Shanghai Petrochemical Company Limited

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED