Shanghai Petrochemical soars 771pc on Asia revival

PUBLISHED : Thursday, 26 August, 1999, 12:00am
UPDATED : Thursday, 26 August, 1999, 12:00am


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H share Shanghai Petrochemical, the mainland's largest petrochemical complex, posted a 771.35 per cent rise in net profit to 237.89 million yuan (about HK$221.92 million) in the six months to June 30.

The result, surpassing most expectations, came a year after the sector suffered its most difficult period amid a regional supply glut due to Asia's financial crisis.

During the first half of last year, net profit slumped to 27.3 million yuan.

Despite the latest recovery, the earnings figure paled in comparison with those in the heydays before 1997.

Company chairman Lu Yiping attributed the improvement to the mainland's anti-smuggling campaign and the recovery in the Asian economy and the mainland's petrochemical industry.

Amid unfavourable market conditions, the company achieved a new output record, offsetting falling product prices.

It processed 2.53 billion tonnes of crude oil, 13.91 per cent more than a year earlier; 285,200 tonnes of ethylene, up 34.48 per cent; 295,800 tonnes of petrol, an increase of 14.3 per cent; and 399,300 tonnes of diesel oil, a 239.67 per cent rise.

Turnover advanced 31.22 per cent to 5.8 billion yuan.

Operating profit moved back into the black at 283.26 million yuan, compared with an operating loss of 100.94 million yuan a year earlier.

Earnings per share were 3.3 fen versus 0.4 fen a year ago.

The directors did not recommend an interim dividend.

Analysts said the quicker than anticipated recovery of the Asian economy and the accompanying tighter supply-and-demand balance in the region's spot market helped lift the company's bottom line.

Also making a contribution were Beijing's efforts to protect domestic manufacturers from a flood of cheap goods from overseas companies as well as producers' ability to pass on rising crude oil prices after the shutdown of a number of regional plants for maintenance in the second quarter.

Shanghai Petrochemical makes synthetic fibres, resins and plastics, intermediate petrochemicals and petroleum products.