Shanghai Petrochemical Announces 2010 Annual Results

HONG KONG, March 25, 2011 /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, 2010(the "Year").

According to IFRS, turnover of the Group for the Year amounted to RMB77,520.7 million, representing an increase of 50.07% over the previous year. Profit attributable to equity shareholders of the Company amounted to RMB2,772.0 million, an increase of 74.21% over the corresponding period of the previous year. Basic earnings per share was RMB0.385 (2009: RMB0.221). The board of directors recommended payment of a dividend of RMB1.00 per 10 shares (including tax) for the Year (2009: RMB0.30 per 10 shares (including tax)).

Mr. Rong Guangdao, Chairman of Shanghai Petrochemical, said, "In 2010, the Group actively capitalized on various favorable conditions such as a better overall macro-environment than that in 2009, a sound economic operation of the domestic petroleum and petrochemical industry, relatively reduced volatility in international crude oil prices, relatively sufficient adjustments of the prices of domestic refined oil products, an increase in demand from the petrochemical market, and the completion and operation of the entire Phase 5 Project of the Company. The Group has thereby increased total output unswervingly, accelerated development with concerted efforts, completed all the production and operation tasks for the year, reached a record high in various indicators such as crude oil processing volume, ethylene output, total volume of goods as well as turnover, and achieved good operating results."

In 2010, the Group's net sales amounted to RMB72,095.9 million, representing an increase of 52.28% over the corresponding period of the previous year, of which net sales derived from synthetic fibres, resins and plastics, intermediate petrochemical products and petroleum products increased by 38.35%, 21.50%, 104.33% and 51.89%, respectively.

In 2010, the Group's total volume of goods exceeded 10,000 kt for the first time to reach 11,481.1 kt, an increase of 29.24% over the corresponding period of the previous year. During the Year, the Group processed 10,520.7 kt of crude oil (including 408.9 kt of crude oil processed on a sub-contracting basis), up 20.13%. Total production output of gasoline, diesel and jet fuel increased by 25.34%. Specifically, output of gasoline was 932.4 kt, output of diesel was 3,675.9 kt and output of jet fuel was 765.7 kt, up 15.68%, 31.16% and 12.77% respectively. The Group produced 972.9 kt of ethylene and 523.2 kt of propylene, up 4.87% and 7.30 % respectively. The Group also produced 1,133.7 kt of synthetic resins and copolymers, up 4.03%; 950.1 kt of synthetic fibre monomers, 643.2 kt of synthetic fibre polymers and 253.6 kt of synthetic fibre, up 86.77%, 7.25% and 5.10% respectively. 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 99.97% and 100.12%, respectively.

In 2010, international crude oil prices fluctuated within a narrow range which was not commonly seen during the past 15 years. The Group's average unit cost of crude oil processed was RMB3,925.56 per ton, representing an increase of 29.98%. The Group's crude oil costs amounted to RMB39,694.6 million, accounting for 58.11% of the Group's annual cost of sales.

During the Year, the Group commenced the construction of the Phase 6 Project in full scale, which comprised the oil refining renovation project as the principal component. Specifically, the natural gas integrated utilization project was gradually put into operation in the first quarter, and good economic benefits were reaped. The upgrade project for optimization of energy saving and consumption reduction of No. 2 oxidation device system commenced on July 29th. Equipment procurement and pile foundation treatment for long-term cycles have been carried out for the carbon fiber project with a capacity of 1,500 tons/year and the refinery revamping and expansion project. The preliminary work for other projects such as the isoamylene device project with a capacity of 10,000 tons/year, the ethanolamine project with a capacity of 50,000 tons/year and the EVA project with a capacity of 100,000 tons/year proceeded as planned. Meanwhile, other key technical renovation projects of the Group were steadily implemented as planned.

Looking forward, Mr. Rong Guangdao said, "In 2011, the macroeconomic situation will improve further. The full start of the planning for the development of strategic emerging industries will give rise to the commencement of a large number of investment projects for industrial upgrade, and will drive increasing demand from the domestic market for petroleum and petrochemical products. However, international crude oil prices will continue to stay high; the growth in the petrochemical industry will slow; the increase in demand from the domestic market will slow in general although such demand will continue to rise; and market competition will become more intense due to the structural overcapacity. 2011 marks the commencement of the "Twelfth Five-year Plan". The Group will actively capitalize on the favorable market environment and opportunities; devote efforts to health, safety, environment and energy conservation and emissions reduction work; continuously optimize production and operation for profitability; and push forward in full scale the construction of the Phase 6 Project and the progress on corporate technology; push forward sophisticated management on an ongoing basis, with a view of endeavoring to achieve stable growth in profitability."

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.

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 visit the following link for the Consolidated Income Statement (Unaudited): http://www.prnasia.com/sa/attachment/2011/03/20110325759930.pdf

SOURCE Sinopec Shanghai Petrochemical Company Limited