Shanghai Petrochemical Announces 2009 Annual Results

HONG KONG, March 28 /PRNewswire-Asia/ -- Sinopec Shanghai Petrochemical Company Limited ("Shanghai Petrochemical" or the "Company") (HKEx: 00338; 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 December 31, 2009 (the "Year").

According to IFRS, turnover of the Group for the Year amounted to RMB51,657.9 million (2008: RMB60,226.9 million). Profit attributable to equity shareholders of the Company amounted to RMB1,591.0 million (2008: RMB6,238.4 million in loss), and basic earnings per share was RMB0.221 (2008: Loss per share RMB0.866). The board of directors recommended payment of a dividend of RMB0.30 per 10 shares (including tax) for the Year (2008: Nil).

Mr. Rong Guangdao, Chairman of Shanghai Petrochemical, said, "In 2009, the Group took an aggressive approach to cope with the profound impact brought by the global financial crisis by striving to capitalize on the favorable conditions such as the substantial fall in international crude oil prices compared to the previous year, the improved macroeconomic policies and the recovery of the petrochemical market, and pushed ahead various work in full scale on production operations as well as reform and development. As a result, production operations remained sound and stable; all the projects related to the structural adjustment project (Phase 5) were completed; corporate management was strengthened; and the system reform of auxiliary businesses was completed smoothly. The major objectives identified at the beginning of 2009 were fully achieved and profitability had substantially improved over the previous year."

In 2009, the Group's net sales amounted to RMB47,345.3 million, representing a decrease of 20.20% over the previous year, of which net sales derived from synthetic fibres, resins and plastics, intermediate petrochemical products and petroleum products decreased by 22.89%, 17.42%, 18.02% and 31.34%, respectively.

The Group strived to maintain stable production operations on an ongoing basis. It processed 8,757,800 tons of crude oil, down 5.20% over the previous year. Production output of gasoline, diesel and jet fuel decreased by 11.16% over the previous year, among which output of gasoline was 806,000 tons, up 4.28% over the previous year; output of diesel was 2,802,600 tons, down 18.02% over the previous year; and output of jet fuel was 679,000 tons, up 6.98% over the previous year. The Group produced 927,700 tons of ethylene and 487,600 tons of propylene, up 4.75% and 0.06%, respectively, over the previous year. The Group also produced 1,089,800 tons of synthetic resins and copolymers, up 9.13% over the previous year; 508,700 tons of synthetic fibre monomers and 599,700 tons of synthetic fibre polymers, up 10.13% and 2.42%, respectively, over the previous year; and 241,300 tons of synthetic fibres, down 10.63% over the previous year. Meanwhile, the quality of the Group's products was consistently maintained at a premium level. The Group's output-to-sales ratio and receivables recovery ratio were 99.62% and 99.52%, respectively.

In 2009, the Group's crude oil costs amounted to RMB26,450 million, accounting for 58.76% of the Group's annual cost of sales. The average unit cost of crude oil processed was RMB3,020.15 per ton, representing a substantial decrease of 43.06% over the previous year. Crude oil costs of the Group for the Year decreased by RMB22,547 million as compared to 2008.

During the Year, all the projects under the Group's structural adjustment project (Phase 5) involving a total investment of approximately RMB8,000 million and spanning a period of six years were completed and put into operation. Of these projects, the new 600,000 ton/year PX aromatics complex and the new 150,000 ton/year C5 segregation plant commenced operation successfully after having commissioned the first test run on 14 September 2009 and 25 October 2009, respectively; the flue gas desulphurization project for furnaces No. 3 and No. 4 of coal-fired power generating plants commenced operation on 3 July 2009; and the entire renovation project for the 220,000- volt substation commenced operation on 22 June 2009. The completion and operation of all the projects under the structural adjustment program laid a solid foundation for growth in the Group's profitability in the future.

Looking forward, Mr. Rong Guangdao said, "In 2010, China's macroeconomic situation is expected to remain positive. The policies for boosting domestic demand and stabilizing overseas demand are gradually becoming more effective, and this should stimulate continued growth in market demand for domestic petroleum and petrochemical products. However, at the same time the upward trend of international crude oil prices has remained unchanged; newly added global production capacity for oil refining and ethylene may be released at the same time, in which case overcapacity would become more acute and competition would escalate as a whole. The Group will, in line with the changes in the external economic environment, continue to actively capitalize on market opportunities; strengthen HSE (health, safety and environment) and energy conservation and emissions reduction work on an ongoing basis; maintain the operation of production plants for a long cycle and at full capacity; strengthen internal management, devote dedicated efforts to project construction and strive to bring production operations, reform and development as well as harmony and stability to a new level again."

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 which is at the southwest of 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.

Forward-looking statements

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 click here to see the company's Consolidated Income Statement (Audited): http://www.prnasia.com/sa/attachment/2010/03/20100326892292.pdf

SOURCE Sinopec Shanghai Petrochemical Company Limited