Date
23 November 2017
In February, Sinopec Shanghai Petrochemical cleared most of the crude it bought when prices were higher. Photo: Internet
In February, Sinopec Shanghai Petrochemical cleared most of the crude it bought when prices were higher. Photo: Internet

Sinopec Shanghai Petrochemical expects to report 1Q profit

Sinopec Shanghai Petrochemical Co. Ltd (000338.HK) expects to report a profit for the first quarter after announcing a huge loss last year.

The company recorded a net loss of 692.2 million yuan (US$111.55 million) for the year to Dec. 31 compared with a net profit of 2.06 billion yuan in 2013, it said in a stock exchange filing.

Revenue fell 11.57 percent to 102.13 billion yuan from a year earlier. Basic loss per share was 6.4 fen, down from 19 fen in the previous year.

The board did not propose any final dividend.

The loss was mainly attributed to sluggish market demand and weak prices for its petroleum and petrochemical products amid falling world crude oil prices, chairman Wang Zhiqing told a press conference on Tuesday.

However, he said the company slashed its crude oil inventory, easing pressure on its refining and petrochemical business.

Most of the crude it bought when prices were higher was cleared in February and the refining business has improved significantly this month, he said.

Wang expects the company to report a profit in the first quarter, and if oil prices remain relatively stable, it could also see some gains in the first half.

Prices of its petroleum and petrochemical products tumbled 20-30 percent in the second half last year while crude costs were down about 50 percent, helping improve the company’s bottom line.

Wang said low oil prices maybe the “new normal” for the next three to five years.

He said he has no idea about a reported capital injection plan by parent Sinopec, adding the company has sufficient cash flow.

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RA

EJ Insight reporter

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