Strong sales lift firm's interim

INTERIM results from Tianjin Bohai Chemical Industry (Group) Co saw profit attributable to shareholders at 72.28 million (about HK$65.12 million at the June 30 exchange rate).

In the group listing prospectus in May, the forecast profit for the year to December 31 was 143 million yuan, with earnings per share of 0.108 yuan and dividend at 0.04 yuan.

Earnings per share for the first half were 0.072 yuan.

Unlike some of its H-share counterparts, the group said its results were not affected by either the impact of the unification of the yuan or provisions for bad debt.

Chairman Xiang Bopeng said: ''In the first half of the year, the group recorded a steady growth in the sales of its three main products.'' Turnover was 1.18 billion, with profit before tax at 84.7 million yuan.

About 334,265 tonnes of soda ash were sold, against 625,000 for the whole of last year.

For caustic soda, 137,396 tonnes were sold, compared with 282,000 last year.

For PVC, 59,646 tonnes were sold against 115,000 last year.

''The sale of lindane [a colourless crystalline chlorinated derivative of cyclohexane and used as an insecticide] during the period was adversely affected by changes in international market conditions,'' said Mr Xiang.

In the accounts there were no transfers for statutory reserves or the welfare fund.

Construction of two power plants was completed in the period along with a plant for dense soda ash and caustic soda. Construction of new plants was going ahead, Mr Xiang said.

''Although the company postponed the proposed A-share offer [after a government ban on such issues] in the second half of the year, the group is still in a financially well-placed position.'' Mr Xiang said the proceeds from the Hong Kong listing, of $408 million, were adequate for the financing of the group's various expansion projects.

Its closing price on Friday was $1.035. The stock was on a prospective price-earnings ratio 9.5 times.

''In the second half of the year, the group will continue to adhere firmly to the policy of cost reduction, improve product quality and product diversification,'' said Mr Xiang.

He said the directors were optimistic the group would continue to maintain its market position in the marine chemical industry.

In March, the company said Tianjin Bohai's power capacity was about 60,000 to 70,000 kilowatts, satisfying only one-fifth of demand.

The group plans to raise its power capacity to 100,000 kW by the end of this year, and 120,000 to 130,000 kW by 1996.

About 10 per cent of its products are exported to Europe, America, and Southeast Asia, bringing in US$30 million to $40 million a year.