Petrochemical complex hurt by price drop

PUBLISHED : Thursday, 27 August, 1998, 12:00am
UPDATED : Thursday, 27 August, 1998, 12:00am

Shanghai Petrochemical, the mainland's largest petrochemical complex, reported an operating loss of 100.94 million yuan (about HK$93.92 million) in the first half of this year, as it fell victim to sliding product prices.

The H share recorded an operating profit of 368.93 million yuan in the year-ago period.

Buoyed by an exceptional gain of 120 million yuan, Shanghai Petrochemical's interim net profit amounted to 27.3 million yuan, 91.4 per cent below the previous figure.

The exceptional item represented guaranteed product-supply loans from unrelated customers in previous years and were not required to be repaid.

Turnover in the period decreased 22.6 per cent from the previous year to 4.42 billion yuan.

Earnings per share plunged 91.3 per cent to 0.38 fen. No interim dividend was proposed.

Shanghai Petrochemical's disastrous result highlighted the problems of the mainland's petrochemical sector, which was pummelled by a regional supply glut and competition.

Asian manufacturers opted to dump their products in the mainland as demand in their countries dwindled after the financial crisis. Currency depreciations also made their products more competitive.