Shanghai Petrochemical's profit jumps 74pc in first half

PUBLISHED : Thursday, 17 August, 2000, 12:00am
UPDATED : Thursday, 17 August, 2000, 12:00am

Shanghai Petrochemical's net earnings jumped 74.15 per cent in the first half of the year on the back of strong demand for petrochemical products.

Profit attributable to shareholders for the first six months of the year was 414.3 million yuan (about HK$388.15 million) compared with 237.9 million yuan in the same period last year.

The company did not pay any dividend on its earnings per share of 5.8 fen. Turnover was 9.36 billion yuan in the six months to June compared to 5.8 billion yuan in the same period last year.

'[The mainland's] petrochemical industry bottomed out and saw a strong demand for petrochemical products,' said Shanghai Petrochemical chairman Lu Yiping.

The company increased its production of processed crude oil by 21.55 per cent in the first half of the year. Its management expects the cost of crude oil to remain high in the second half which will maintain upward pressure on the company's costs.

'However, in line with the international market, the price of refined oil is rising steadily. This will relieve the cost pressure on the company,' Mr Lu said.

He expects increasing demand for the company's other products to help offset the impact of high crude oil prices.

The stock, which closed at HK$1.39 yesterday, is expected to see some downward pressure with the listing of China Petrochemical Corp (Sinopec). The listing is expected to take place later this year which may attract investors attention away from Shanghai Petrochemical.

'Sinopec [shares] probably will be offered at an attractive discount,' the head of research at one brokerage said.

The company will overhaul of some of its production facilities in the second half but did not say which projects would be affected.