Sinopec Engineering vows to maintain high margins
As China Petrochemical oil refining arm debuts, chairman is confident firm can control costs
Despite rising cost pressures, Sinopec Engineering, the oil refining and chemical plants engineering subsidiary of China Petrochemical Corp, will strive to maintain a gross profit margin higher than the industry average, its chief said yesterday.
"Rising costs is something that is affecting all sorts of industries, and our gross profit margins and profits are related to industry cycles," said chairman Cai Xiyou, speaking after the company's listing debut ceremony.
"We are confident of being able to control costs after our restructuring, and given our expectation of relatively good business growth, we aim to maintain higher-than-industry margins," Cai said.
Sinopec Engineering's shares ended yesterday at HK$10.46, 0.4 per cent lower than their issue price of HK$10.50.
The company saw its overall gross margin fall to 14.3 per cent last year from 16.6 per cent in 2011, after posting a margin of 15.2 per cent in 2010.
The lower margin and higher operating expenses meant its net profit fell 1.7 per cent last year compared to 2011, to 3.32 billion yuan (HK$4.16 billion).