HONG KONG, March 27, 2013 /PRNewswire/ -- 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") for the year ended December 31, 2012 (the "Year").
Under the International Financial Reporting Standards ("IFRS"), turnover of the Group for the Year amounted to RMB93,008.3 million, representing a slight decrease of 2.63% over the previous year. Loss attributable to equity shareholders of the Company amounted to RMB1,528.4 million (2011: profit attributable to equity shareholders of the Company of RMB956.1 million). Basic loss per share was RMB0.212 (2011: basic earnings per share of RMB0.133). The board of directors of the Company does not recommend payment of a dividend for the Year.
Mr. Rong Guangdao, Chairman of Shanghai Petrochemical, said, "In the year of 2012, The world's petrochemical industry stays at a relatively low stage of the cycle, marked by a slower rate of growth in the demand for petrochemical products and diminishing gross profits in the industry. Although the production levels of China's petrochemical industry remained basically steady, the volatility in the market prices of international crude oil at high price levels, the increase in the Group's operating costs, the Group's losses in the refining business due to policy factors, the sharp fall in the prices of petrochemical products, output reduction for the purpose of carrying out maintenance work at some of the Group's production facilities, substantial reduction in long-term investment return from the subsidiaries such as Secco, led to a substantial loss in the Group's results for the Year. Faced with the challenging business environment, the Group focused its efforts on production, business operations and management; accorded priority to development quality of the projects and their economic return; continued to improve safety and environmental-friendliness and to maintain stable in production and operations; and to continue to push forward its optimisation programme. The major plants of the Phase 6 Project were successfully completed and went on stream."
For the year ended December 31, 2012, the Group's net sales amounted to RMB87,217.3 million, a decrease of 2.56% from RMB89,509.7 million for the previous year. The weighted average prices (excluding tax) of the Group's synthetic fibres, resins and plastics and intermediate petrochemical products decreased by 20.92%, 9.98% and 3.81%, respectively from 2011. The weighted average price (excluding tax) of petroleum products increased by 3.24% over 2011.
In 2012, the Group maintained physical production volumes at stable levels, with the total volume of goods produced amounted to 11,844,100 tons, representing a decrease of 1.31% over the previous year. During the Year, the Group processed 11,193,500 tons of crude oil (including 563,000 tons of crude oil processed on a sub-contract basis), representing an increase of 3.01%. Total production output of gasoline, diesel and jet fuel was 5,878,800 tons, representing an increase of 2.32%, among which the Group produced 1,020,300 tons of gasoline, 4,027,900 tons of diesel and 830,600 tons of jet fuel, representing increases of 5.35%, 1.21% and 4.18%, respectively. The Group produced 914,700 tons of ethylene and 504,400 tons of propylene, representing increases of 0.51% and 4.71%, respectively. The Group produced 866,200 tons of paraxylene, representing a decrease of 6.16%. The Group also produced 1,087,500 tons of synthetic resins and copolymers (excluding polyesters and polyvinyl alcohol), representing a decrease of 0.95%; 1,015,600 tons of synthetic fibre monomers, representing an increase of 7.33%; 636,100 tons of synthetic fibre polymers, representing a decrease of 4.23%; and 251,600 tons of synthetic fibre, representing an increase of 0.64%. Meanwhile, the Group continued to maintain a premium level of quality of its products. Its output-to-sales ratio was 100.06%, while its receivable recovery ratio was 100.05%. The value of the Group's annual imports and exports amounted to US$9,016 million, representing an increase of 18.40%.
During the Year, in view of international crude oil prices fluctuated at higher levels due to instability in the Middle East, significant changes in the macro-economic condition in Europe and the United States, as well as significant changes in the supply and demand of crude oil in the United States, the operating costs of the Group increased, with the Group's total costs of crude oil processing reaching RMB55,538.0 million in 2012, representing an increase of 3.77% compared to RMB53,521.9 million for the previous year. Meanwhile, due to low levels of activity in the market as well as further intensified market competition, the operating profit of the Group decreased by RMB2,832.2 million over the previous year.
In 2012, construction of the Group's Phase 6 Project, in which the Group made an investment of RMB3,811.0 million for the year, proceeded in full swing, with the Refinery Revamping and Expansion Project and the Technological Advancement Programme items as its key. In December 2012, Refinery Revamping and Expansion Project was completed and put into operation, enhancing the Group's production capacity in deep processing of crude oil, improving the mix of refined oil products and further optimising feedstock allocation. The whole process flow for the first stage of the Carbon Fibre Project, with a capacity of 1,500 tons/year, was interconnected and went on stream for trial operation. Meanwhile, the Up-grading Project for the Optimisation of the system and reduction in energy and feedstock consumption of the No. 2 PTA plant, and the secondary desulfurisation facilities for Furnaces 5 and 6 under the thermoelectric division were completed and put into operation.
Looking forward, Mr. Rong Guangdao said, "Despite the uncertainty that remains in the global economy, China's overall domestic consumer market will continue with its stable growth. We expect the operations of the petroleum and chemical industries to maintain stable overall, and will pick up growth momentum as part of a steady and positive development trend. The Group aims to develop itself into an advanced refining and petrochemical enterprise. In 2013, the Group will focus on improving its development quality of the projects and their economic return, adjusting its structure, deepening its reform and strengthening its management etc. It will make the most of the advantages it derives from the operation of the Refinery Revamping and Expansion Project and the Technological Advancement programme items, and will strive to improve its economic returns."
Shanghai Petrochemical is one of the largest petrochemical companies in China and 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 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.
Encl: Consolidated Income Statement
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SOURCE Sinopec Shanghai Petrochemical Company Limited