China BlueChemical Ltd. (03983.HK), the chemical fertiliser and methanol production unit of China National Offshore Oil Corp., said net profit fell 94 percent to 105 million yuan (US$16.9 million) in 2014 from the previous year.
The fall was largely due to impairment losses on several projects, the company told a press conference Friday.
Revenue was 10.8 billion yuan, up 1 percent from the previous year. Basic earnings per share were 2 fen.
The board proposed a final dividend of 1 fen per share and a special dividend of 11 fen.
“The domestic fertiliser industry was impacted by oversupply and intense market competition in 2014,” chief executive Wang Hui said.
The government slashed peak-season export tariffs on urea and ammonium phosphate, boosting export volumes and easing oversupply in the domestic market, he said.
Urea sales were 1.96 million tons, of which 44 percent went to overseas markets, up 71 percent from 2013, chief financial officer Quan Changsheng said.
Revenue from urea was 3.39 billion yuan.
Phosphate fertiliser sales rose 19 percent to 9.51 tons and compound fertiliser sales were 42,000 tons.
Altogether, exports were 249,000 tons, up 64 percent from a year earlier.
Revenue from phosphate fertilisers and compound fertilisers increased 22 percent to 2.64 billion yuan from the previous year.
Sales of methanol were 1.47 million tons, bringing in 3.28 billion yuan.
Given oversupply in the polyoxymethylene (POM) sector and declining sale prices, Quan said the company is considering closing the POM business, which contributed about 2 percent of net profit.
Chairman Li Hui said the company has no plans to expand capacity but will explore opportunities in higher value-added businesses and products such as gas-based chemical projects.
It plans reduce capital expenditure to 510 million yuan in 2015, down from 967 million yuan in 2014. Most of the spending will be in its urea projects in Heilongjiang province, Li said.
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