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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2008
Commission File Number: 1-12158
Sinopec Shanghai Petrochemical Company Limited
(Translation of registrant’s name into English)
Jinshanwei, Shanghai
The People’s Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-Not Applicable
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SINOPEC SHANGHAI PETROCHEMICAL COMPANY LIMITED
Form 6-K
TABLE OF CONTENTS
2
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SINOPEC SHANGHAI PETROCHEMICAL COMPANY LIMITED | ||||
| Date: October 30, 2008 | By: | /s/ Rong Guangdao | ||
| Name: | Rong Guangdao | |||
| Title: | Chairman | |||
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To: Business Editor
[For Immediate Release]
Shanghai Petrochemical Announces Results
for the First Three Quarters of 2008
Hong Kong, October 29, 2008 … Sinopec Shanghai Petrochemical Company Limited (“Shanghai Petrochemical” or the “Company”) (HKEx: 338; SSE: 600688; NYSE: SHI) announced today the unaudited operating results of the Company and its subsidiaries (the “Group”) for the nine-month period ended September 30, 2008 (the “Period”).
Under the China Accounting Standards for Business Enterprises, the Group’s operating income for the Period amounted to RMB49.864 billion, representing an increase of RMB10.305 billion or 26% compared to the same period of last year. Operating loss for the Period was RMB5.710 billion (for the same period of 2007: operating profit was RMB2.291 billion). Net loss attributable to equity shareholders of the Company for the Period was RMB2.679 billion (for the same period of 2007: net profit attributable to equity shareholders of the Company was RMB1.664 billion). Basic diluted losses per share was RMB0.372 (for the same period of 2007: basic diluted profits per share was RMB0.231).
Mr. Rong Guangdao, Chairman of Shanghai Petrochemical, said, “From January 2008 to July 2008, the crude oil costs of the Company surged substantially as international crude oil prices soared continuously. Prices of refined oil products and crude oil were seriously inverted as a result of the Government’s stringent control over the domestic prices of refined oil products, which led to a severe loss in the Company’s oil refining operation. Since July 2008, following the rapid drop in international crude oil prices coupled with the worsening impact of the international financial crisis on the industry, consumption and market demand for downstream petrochemical products had dropped, which led to a substantial decline in the prices of petrochemical products. At the same time, it takes time for the Company to absorb the cost of the crude oil and intermediate raw materials which it had purchased at high prices; and the Group received a substantially reduced amount of financial subsidies for its oil refining operation during the third quarter of the year. The above-mentioned result in a significant loss in the Group’s net profit for the period January to September 2008.”
Shanghai Petrochemical is one of the largest petrochemical companies in the PRC and was one of the first Chinese companies to effect a global securities offering. Located in Jinshan District in the southwest of Shanghai, it is a highly integrated petrochemical complex which processes crude oil into a broad range of products in synthetic fibres, resins and plastics, intermediate petrochemicals and refined oil products.
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Shanghai Petrochemical Announces Results for the First Three Quarters of 2008…p.2
This press release contains statements of a forward-looking nature. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that the PRC economy may not grow at the same rate in future periods as it has in the last several years, or at all, including as a result of the PRC government’s macro-economic control measures to curb over-heating of the economy; uncertainty as to global economic growth in future periods; the risk that prices of the Company’s raw materials, particularly crude oil, will continue to increase; the risk that the Company may not be able to raise its product prices (particularly refined oil products) accordingly which would adversely affect the Company’s profitability; the risk that new marketing and sales strategies may not be effective; the risk that fluctuations in demand for the Company’s products may cause the Company to either over-invest or under-invest in production capacity in one or more of its four major product categories; the risk that investments in new technologies and development cycles may not produce the benefits anticipated by management; the risk that the trading price of the Company’s shares may decrease for a variety of reasons, some of which may be beyond the control of management; competition in the Company’s existing and potential markets; and other risks outlined in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update this forward-looking information, except as required under applicable law.
– End –
Encl: Consolidated Income Statement (Unaudited)
For further information, please contact:
Ms. Christy Lai / Ms. Eva Law
Rikes Hill & Knowlton Limited
Tel: (852) 2520 2201
Fax: (852) 2520 2241
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Shanghai Petrochemical Announces Results for the First Three Quarters of 2008…p.3
Sinopec Shanghai Petrochemical Company Limited
Consolidated Income Statement (Unaudited)
Prepared under the China Accounting Standards for Business Enterprises (2006)
| For the nine-month period ended 30 September |
||||||
| 2008 | 2007 | |||||
| RMB’000 | RMB’000 | |||||
| Operating Income |
49,863,969 | 39,558,923 | ||||
| Less: Operating costs |
52,969,122 | 36,031,006 | ||||
| Business taxes and surcharges |
759,090 | 521,144 | ||||
| Selling and distribution expenses |
401,727 | 361,794 | ||||
| General and administrative expenses |
1,367,664 | 1,333,882 | ||||
| Financial expenses |
276,516 | 148,065 | ||||
| Impairment loss |
71,956 | (206 | ) | |||
| Add:Investment income |
272,481 | 1,127,278 | ||||
| Including: Income from investment in associates and jointly controlled entities |
129,716 | 519,308 | ||||
| Operating (loss) / profit |
(5,709,625 | ) | 2,290,516 | |||
| Add:Non-operating income |
2,253,760 | 19,843 | ||||
| Less: Non-operating expenses |
32,110 | 80,188 | ||||
| Including: Loss from disposal of non-current assets |
2,729 | 33,546 | ||||
| (Loss) / profit before taxation |
(3,487,975 | ) | 2,230,171 | |||
| Less: Income tax |
(842,985 | ) | 523,065 | |||
| Net (Loss) / profit |
(2,644,690 | ) | 1,707,106 | |||
| Attributable to: |
||||||
| Equity shareholders of the Company |
(2,679,272 | ) | 1,664,225 | |||
| Minority Interests |
34,282 | 42,881 | ||||
| Basic and diluted (loss) / earnings per share |
(0.372 | ) | 0.231 | |||
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2008 Third Quarterly Report
This announcement is published simultaneously in Shanghai and Hong Kong. This announcement is published pursuant to the Rules Governing Listing of Stocks on Shanghai Stock Exchange in the People’s Republic of China and pursuant to the disclosure obligations under Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
| 1 | IMPORTANT MESSAGE |
| 1.1 | The board of directors (the “Board”) and the supervisory committee of Sinopec Shanghai Petrochemical Company Limited (the “Company” or “SPC”) as well as its directors, supervisors and senior management warrant that there are no false representations, or misleading statements contained in, or material omissions from this report, and severally and jointly accept full responsibility for the truthfulness, accuracy and completeness of the information contained in this report. |
| 1.2 | All of the Company’s directors attended the Board meeting approving this report. |
| 1.3 | The financial statements of the Company’s third quarterly report were unaudited. |
| 1.4 | Mr. Rong Guangdao, Chairman and President of the Company, Mr. Han Zhihao, Executive Director and Chief Financial Officer, overseeing the accounting operations and Mr. Zhou Meiyun, Finance Manager (Accounting Chief), hereby warrant the truthfulness and completeness of the financial report contained in this report. |
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| 2 | BASIC INFORMATION OF THE COMPANY |
| 2.1 | Major Accounting Data and Financial Indicators |
Currency: RMB
| As at the end of the reporting period (30 September 2008) |
As at the end of the previous year (31 December 2007) |
Increase/ (decrease) as compared to the end of the previous year (%) | ||||
| Total assets (‘000) |
31,243,794 | 30,494,334 | 2.46 | |||
| Shareholders’ equity (excluding minority interests) (‘000) |
17,511,093 | 20,999,444 | -16.61 | |||
| Net asset value per share attributable to equity shareholders of the Company (RMB) |
2.432 | 2.917 | -16.63 |
| From the beginning of the year to the end of the reporting period (January 2008 - September 2008) |
Increase/ (decrease) as compared to the corresponding period of the previous year (%) | ||||
| Net cash flow from operating activities (‘000) |
(3,289,825 | ) | -262.99 | ||
| Net cash flow per share from operating activities (RMB) |
(0.457 | ) | -263.21 |
| The reporting period (July 2008 - September 2008) |
From the beginning of the year to the end of the reporting period (January 2008 - September 2008) |
Increase/ (decrease) as compared to the corresponding reporting period (July-September) of the previous year (%) | ||||||
| Net loss attributable to equity shareholders of the Company (‘000) |
(2,306,500 | ) | (2,679,272 | ) | — | |||
| Basic loss per share (RMB) |
(0.320 | ) | (0.372 | ) | — | |||
| Basic loss per share excluding non-recurring items (RMB) |
— | (0.613 | ) | — | ||||
| Diluted loss per share (RMB) |
(0.320 | ) | (0.372 | ) | — | |||
| Fully diluted return on net assets (%) |
-13.172 | -15.300 | 12.723 percentage points decrease | |||||
| Fully diluted return on net assets excluding non-recurring items (%) |
-15.746 | -25.203 | 14.818 percentage points decrease |
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| Non-recurring items | From the beginning of the year to the end of the reporting period (January 2008 to September 2008) |
||
| (‘000) Excluding method: By item |
|||
| Gain from disposal of non-current assets |
138,463 | ||
| Subsidy income |
2,231,557 | ||
| Employee reduction expenses |
(39,984 | ) | |
| Net expenses of non-operating income/(expenses) other than those mentioned above |
(18,020 | ) | |
| Less: Tax effect for the above items |
(578,004 | ) | |
| Total |
1,734,012 | ||
| 2.2 | Number of shareholders at the end of the reporting period and shareholdings of the top ten holders of circulating shares |
| Unit: Share | ||
| Total number of shareholders as at the end of the reporting period |
162,660 |
Shareholdings of the top ten holders of circulating shares
| Name of shareholders (in full) |
Number of shares in circulation held at the end of the reporting period |
Type of shares | ||
| HKSCC (Nominees) Ltd. (
|
2,301,172,101 | Overseas listed foreign shares | ||
| China Minsheng Banking Corp., Ltd. — Orient Selected Mixed Open-end Securities Investment
Fund (
|
76,221,220 | RMB-denominated ordinary shares | ||
| Agricultural Bank of China — Zhongyou Core Growth Equity Securities Investment Fund (
|
13,166,599 | RMB-denominated ordinary shares | ||
| China Construction Bank — CIFM China Advantage Fund (
|
11,814,593 | RMB-denominated ordinary shares | ||
| Bank of China — Harvest Shanghai Shenzhen 300 Index Securities Investment Fund |
7,085,057 | RMB-denominated ordinary shares | ||
| Yip Chok Chiu |
3,150,000 | Overseas listed foreign shares | ||
| China Construction Bank — Boshi Yufu Securities Investment Fund (
|
2,812,155 | RMB-denominated ordinary shares | ||
| Shanghai Junfa Trading Co., Ltd. (
|
2,350,000 | RMB-denominated ordinary shares | ||
| Guotai Junan — China Construction Bank — Hong Kong and Shanghai Banking Corp., Ltd. |
2,005,147 | RMB-denominated ordinary shares | ||
| Chen Jia (
|
3,150,000 | RMB-denominated ordinary shares | ||
)
)
)
)
)
)
)
)
)
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| 3 | IMPORTANT ITEMS |
| 3.1 | Situation and reasons for the significant changes in the items of accounting statements, financial indicators of the Company |
| i) | Analysis of reasons for the substantial changes in balance sheet items of the Group (the Company and its subsidiaries) as at the end of the reporting period: |
Unit: RMB’000
| Item |
As at 30 September 2008 |
As at 31 December 2007 |
Increase amount |
Change (%) |
Reasons for change | |||||
| Inventories |
7,006,917 | 5,197,849 | 1,809,068 | 34.80 | Substantial increase in crude oil prices | |||||
| Short-term loans |
7,812,570 | 3,672,942 | 4,139,628 | 112.71 | As the Company incurred a substantial loss, it increased its short-term loans for operating capital purpose | |||||
| ii) | Analysis of reasons for the substantial changes in income statement items of the Group from January 2008 to September 2008: |
Unit: RMB’000
| Item |
For the nine-month period ended 30 September |
Increase/ (decrease) amount |
Change (%) |
Reasons for change | ||||||||
| 2008 | 2007 | |||||||||||
| Operating (loss)/profit |
(5,709,625 | ) | 2,290,516 | (8,000,141 | ) | -349.27 | ||||||
| (Loss)/profit before income tax |
(3,487,975 | ) | 2,230,171 | (5,718,146 | ) | -256.40 | Substantial increase in crude oil costs and prices of refined oil products were seriously inverted | |||||
| Net (loss)/ profit |
(2,644,990 | ) | 1,707,106 | (4,352,096 | ) | -254.94 | ||||||
| Net (loss)/ profit attributable to equity shareholders of the Company |
(2,679,272 | ) | 1,664,225 | (4,343,497 | ) | -260.99 | ||||||
| Operating costs |
52,969,122 | 36,031,006 | 16,938,116 | 47.01 | Substantial increase in crude oil costs | |||||||
| Business taxes and surcharges |
759,090 | 521,144 | 237,946 | 45.66 | During the reporting period of 2008, increase in sales of gasoline and diesel resulted in an increase of business taxes and surcharges | |||||||
| Non-operating income |
2,253,760 | 19,843 | 2,233,917 | 11,257.96 | Significant loss in the oil refining operation resulted in an increase in financial subsidies from the State | |||||||
| Income tax |
(842,985 | ) | 523,065 | (1,366,050 | ) | -261.16 | Substantial decrease in profit before income tax | |||||
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| 3.2 | Warning and explanation on projection of a possible loss or material year-on-year change in net profit from the beginning of the year to the end of the next reporting period |
From January 2008 to July 2008, the crude oil costs of the Company surged substantially as international crude oil prices soared continuously. Prices of refined oil products and crude oil were seriously inverted as a result of the Government’s stringent control over the domestic prices of refined oil products, which led to a severe loss in the Company’s oil refining operation. Since July 2008, following the rapid drop in international crude oil prices coupled with the worsening impact of the international financial crisis on the industry, consumption and market demand for downstream petrochemical products had dropped, which led to a substantial decline in the prices of petrochemical products. It takes time for the Company to absorb the cost of the crude oil and intermediate raw materials which it had purchased at high prices. At the same time, the Group received a substantially reduced amount of financial subsidies for its oil refining operation during the third quarter of the year, and at present, the Company is not aware of whether it will continue to receive financial subsidies for its oil refining operation in the fourth quarter of the year. In view of the above, the Company expects the Group to incur a significant loss in net profit for the twelve-month period ending 31 December 2008.
| 3.3 | Securities investments |
Unit: RMB’000
| No. |
Stock code |
Abbreviation | Number of shares held (shares) |
Initial investment cost |
Book value as at the end of the reporting period |
Book value as at the beginning of the year |
Account category | |||||||
| 1 |
600837 | HTSEC | 9,904,098 | 11,164 | 213,631 | 223,354 | Available-for-sale financial assets | |||||||
| 2 |
600000 | SPDB | 2,340,000 | 1,318 | 36,551 | 211,200 | Available-for-sale financial assets | |||||||
| 3 |
600527 | JNGX | 2,983,527 | 898 | 11,844 | 44,239 | Available-for-sale financial assets | |||||||
| Total |
13,380 | 262,026 | 478,793 |
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| 4 | APPENDIX |
| 4.1 | Consolidated Balance Sheet (Unaudited) |
As at 30 September 2008
Prepared under the China Accounting Standards for Business Enterprises (2006)
| As at 30 September 2008 |
As at 31 December 2007 | |||
| RMB’000 (Unaudited) |
RMB’000 (Audited) | |||
| Assets |
||||
| Current assets |
||||
| Cash at bank and on hand |
715,976 | 893,165 | ||
| Bills receivable |
881,327 | 1,800,856 | ||
| Trade debtors |
921,957 | 563,093 | ||
| Advance payments |
168,432 | 123,939 | ||
| Other receivables |
304,710 | 254,420 | ||
| Inventories |
7,006,917 | 5,197,849 | ||
| Total current assets |
9,999,319 | 8,833,322 | ||
| Non-current assets |
||||
| Available-for-sale financial assets |
262,026 | 478,793 | ||
| Long-term equity investments |
3,144,572 | 3,543,769 | ||
| Investment property |
502,713 | 512,793 | ||
| Fixed assets |
14,236,609 | 15,259,283 | ||
| Construction in progress |
1,341,164 | 965,463 | ||
| Intangible assets |
582,511 | 597,897 | ||
| Long-term deferred expenses |
150,029 | 173,807 | ||
| Deferred tax assets |
1,024,851 | 129,207 | ||
| Total non-current assets |
21,244,475 | 21,661,012 | ||
| Total assets |
31,243,794 | 30,494,334 | ||
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| As at 30 September 2008 |
As at 31 December 2007 | ||||
| RMB’000 (Unaudited) |
RMB’000 (Audited) | ||||
| Liabilities and shareholders’ equity |
|||||
| Current liabilities |
|||||
| Short-term loans |
7,812,570 | 3,672,942 | |||
| Bills payable |
652,460 | 300,575 | |||
| Trade creditors |
2,210,362 | 1,913,118 | |||
| Receipts in advance |
546,460 | 429,516 | |||
| Employee benefits payable |
26,109 | 85,651 | |||
| Taxes payable |
(439,954 | ) | 70,533 | ||
| Interest payable |
38,996 | 11,796 | |||
| Dividends payable |
378,052 | — | |||
| Other payables |
1,098,125 | 1,236,529 | |||
| Current portion of non-current liabilities |
454,359 | 419,027 | |||
| Total current liabilities |
12,777,539 | 8,139,687 | |||
| Non-current liabilities |
|||||
| Long-term loans |
319,860 | 639,289 | |||
| Deferred tax liabilities |
93,354 | 150,170 | |||
| Other non-current liabilities |
268,370 | 261,753 | |||
| Total non-current liabilities |
681,584 | 1,051,212 | |||
| Total liabilities |
13,459,123 | 9,190,899 | |||
| Shareholders’ equity |
|||||
| Share capital |
7,200,000 | 7,200,000 | |||
| Capital reserve |
3,042,763 | 3,203,842 | |||
| Surplus reserve |
4,766,408 | 4,766,408 | |||
| Retained earnings |
2,501,922 | 5,829,194 | |||
| Total equity attributable to equity shareholders of the Company |
17,511,093 | 20,999,444 | |||
| Minority interests |
273,578 | 303,991 | |||
| Total equity |
17,784,671 | 21,303,435 | |||
| Total liabilities and shareholders’ equity |
31,243,794 | 30,494,334 | |||
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Balance Sheet
As at 30 September 2008 (Unaudited)
Prepared under the China Accounting Standards for Business Enterprises (2006)
| As at 30 September 2008 |
As at 31 December 2007 | ||||
| RMB’000 | RMB’000 | ||||
| (Unaudited) | (Audited) | ||||
| Assets |
|||||
| Current assets |
|||||
| Cash at bank and in hand |
419,698 | 634,533 | |||
| Bills receivable |
719,058 | 1,669,202 | |||
| Trade debtors |
865,548 | 420,734 | |||
| Advance payments |
165,275 | 105,211 | |||
| Other debtors |
374,626 | 213,481 | |||
| Inventories |
6,527,893 | 4,780,473 | |||
| Total current assets |
9,072,098 | 7,823,634 | |||
| Non-current assets |
|||||
| Available-for-sale financial assets |
250,181 | 434,554 | |||
| Long-term equity investments |
4,448,294 | 5,081,193 | |||
| Investment property |
558,134 | 569,326 | |||
| Fixed assets |
12,957,421 | 13,753,579 | |||
| Construction in progress |
1,311,866 | 940,491 | |||
| Intangible assets |
462,459 | 460,638 | |||
| Long-term deferred expenses |
145,452 | 167,582 | |||
| Deferred tax assets |
1,024,611 | 126,519 | |||
| Total non-current assets |
21,158,418 | 21,533,882 | |||
| Total assets |
30,230,516 | 29,357,516 | |||
| Current liabilities |
|||||
| Short-term loans |
7,589,570 | 3,289,642 | |||
| Bills payable |
644,974 | 285,594 | |||
| Trade creditors |
1,943,469 | 1,797,640 | |||
| Receipts in advance |
508,655 | 397,112 | |||
| Staff costs payable |
20,128 | 68,212 | |||
| Taxes payable |
(428,621 | ) | 46,333 | ||
| Interests payable |
37,650 | 11,796 | |||
| Dividends payable |
375,052 | — | |||
| Other payables |
1,459,425 | 1,585,040 | |||
| Current portion of non-current liabilities |
300,000 | 259,097 | |||
| Total current liabilities |
12,450,302 | 7,740,466 | |||
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| As at 30 September 2008 |
As at 31 December 2007 | |||
| RMB’000 | RMB’000 | |||
| (Unaudited) | (Audited) | |||
| Liabilities and shareholders’ equity |
||||
| Non-current liabilities |
||||
| Long-term loans |
150,000 | 450,000 | ||
| Deferred tax liabilities |
89,340 | 137,186 | ||
| Other non-current liabilities |
268,370 | 261,753 | ||
| Total non-current liabilities |
507,710 | 848,939 | ||
| Total liabilities |
12,958,012 | 8,589,405 | ||
| Shareholders’ equity |
||||
| Share capital |
7,200,000 | 7,200,000 | ||
| Capital reserves |
3,034,553 | 3,171,623 | ||
| Surplus reserves |
4,766,408 | 4,766,408 | ||
| Retained earnings |
2,271,543 | 5,630,080 | ||
| Total equity |
17,272,504 | 20,768,111 | ||
| Total liabilities and shareholders’ equity |
30,230,516 | 29,357,516 | ||
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| 4.2 | Income Statements (Unaudited) |
For the nine-month period ended 30 September 2008
Prepared under the China Accounting Standards for Business Enterprises (2006)
| The Group | The Company | ||||||||||
| 2008 | 2007 | 2008 | 2007 | ||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | ||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||
| Operating income |
49,863,969 | 39,558,923 | 46,274,044 | 35,419,836 | |||||||
| Less: Operating costs |
52,969,122 | 36,031,006 | 49,628,883 | 32,270,719 | |||||||
| Business taxes and surcharges |
759,090 | 521,144 | 750,902 | 511,646 | |||||||
| Selling and distribution expenses |
361,794 | 337,268 | 295,913 | ||||||||
| General and administrative expenses |
1,367,664 | 1,333,882 | 1,194,452 | 1,152,076 | |||||||
| Financial expenses |
276,516 | 148,065 | 237,496 | 122,769 | |||||||
| Impairment loss |
71,956 | (206 | ) | 182,227 | 143 | ||||||
| Add: Investment income |
272,481 | 1,127,278 | 239,535 | 1,312,180 | |||||||
| Including: Income from investment in associates and jointly controlled entities |
129,716 | 519,308 | 111,553 | 499,240 | |||||||
| Operating (loss)/profit |
(5,709,625 | ) | 2,290,516 | (5,817,649 | ) | 2,378,750 | |||||
| Add: Non-operating income |
2,253,760 | 19,843 | 2,252,214 | 16,878 | |||||||
| Less: Non-operating expenses |
32,110 | 80,188 | 31,044 | 67,304 | |||||||
| Including: Loss from disposal of non-current assets |
2,729 | 33,546 | 2,278 | 23,258 | |||||||
| (Loss)/profit before income tax |
(3,487,975 | ) | 2,230,171 | (3,596,479 | ) | 2,328,324 | |||||
| Less: Income tax |
(842,985 | ) | 523,065 | (885,942 | ) | 483,803 | |||||
| Net (loss)/profit |
(2,644,990 | ) | 1,707,106 | (2,710,537 | ) | 1,844,521 | |||||
| Attributable to: |
|||||||||||
| Equity shareholders of the Company |
(2,679,272 | ) | 1,664,225 | ||||||||
| Minority shareholders |
34,282 | 42,881 | |||||||||
| Basic and diluted (loss)/earnings per share |
(0.372 | ) | 0.231 | ||||||||
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Income Statements (Unaudited)
For the three-month period from July to September 2008
Prepared under the China Accounting Standards for Business Enterprises (2006)
| The Group | The Company | |||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
| Operating income |
16,956,208 | 12,675,492 | 15,841,161 | 11,502,283 | ||||||||
| Less: Operating costs |
19,664,728 | 12,352,308 | 18,607,040 | 11,296,551 | ||||||||
| Business taxes and surcharges |
186,340 | 169,068 | 183,581 | 166,334 | ||||||||
| Selling and distribution expenses |
131,371 | 118,693 | 109,441 | 98,663 | ||||||||
| General and administrative expenses |
468,204 | 520,524 | 409,036 | 457,794 | ||||||||
| Financial expenses |
137,482 | 59,308 | 124,989 | 51,835 | ||||||||
| Impairment loss |
— | (100 | ) | — | — | |||||||
| Add: Investment (loss)/income |
(12,619 | ) | 339,992 | (18,144 | ) | 328,400 | ||||||
| Including: (Loss)/income from investment in associates and jointly controlled entities |
(17,385 | ) | 134,396 | (21,947 | ) | 126,364 | ||||||
| Operating loss |
(3,644,536 | ) | (204,317 | ) | (3,611,070 | ) | (240,494 | ) | ||||
| Add: Non-operating income |
611,553 | 8,874 | 611,439 | 8,059 | ||||||||
| Less: Non-operating expenses |
6,053 | 28,381 | 5,393 | 27,455 | ||||||||
| Including: Loss from disposal of non-current assets |
705 | 17,406 | 255 | 17,399 | ||||||||
| Loss before income tax |
(3,039,036 | ) | (223,824 | ) | (3,005,024 | ) | (259,890 | ) | ||||
| Less: Income tax |
(740,428 | ) | (142,179 | ) | (745,626 | ) | (157,274 | ) | ||||
| Net loss |
(2,298,608 | ) | (81,645 | ) | (2,259,398 | ) | (102,616 | ) | ||||
| Attributable to: |
||||||||||||
| Equity shareholders of the Company |
(2,306,500 | ) | (94,065 | ) | ||||||||
| Minority shareholders |
7,892 | 12,420 | ||||||||||
| Basic and diluted loss per share |
(0.320 | ) | (0.013 | ) | ||||||||
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| 4.3 | Consolidated Cash Flow Statements (Unaudited) |
For the nine-month period ended 30 September 2008
Prepared under the China Accounting Standards for Business Enterprises (2006)
| 2008 | 2007 | |||||
| RMB’000 | RMB’000 | |||||
| (Unaudited) | (Unaudited) | |||||
| Cash flows from operating activities: |
||||||
| Cash received from sale of goods and rendering of services |
59,675,620 | 47,213,089 | ||||
| Refund of taxes |
83,917 | 11,611 | ||||
| Other cash received relating to operating activities |
2,116,337 | 8,059 | ||||
| Sub-total of cash inflows |
61,875,874 | 47,232,759 | ||||
| Cash paid for goods and services |
(62,786,689 | ) | (42,378,410 | ) | ||
| Cash paid to and for employees |
(1,375,293 | ) | (1,360,321 | ) | ||
| Cash paid for all types of taxes |
(714,753 | ) | (1,211,204 | ) | ||
| Other cash paid relating to operating activities |
(288,964 | ) | (264,349 | ) | ||
| Sub-total of cash outflows |
(65,165,699 | ) | (45,214,284 | ) | ||
| Net cash (outflow)/inflow from operating activities |
(3,289,825 | ) | 2,018,475 | |||
| Cash flows from investing activities: |
||||||
| Cash received from disposal of investments |
153,997 | 750,523 | ||||
| Cash received from investment income |
540,842 | 389,465 | ||||
| Net cash received from disposal of fixed assets and intangible assets |
16,620 | 54,761 | ||||
| Other cash received relating to investing activities |
49,967 | 32,820 | ||||
| Sub-total of cash inflows |
761,426 | 1,227,569 | ||||
| Cash paid for acquisition of fixed assets and intangible assets |
(848,334 | ) | (1,613,874 | ) | ||
| Sub-total of cash outflows |
(848,334 | ) | (1,613,874 | ) | ||
| Net cash outflow from investing activities |
(86,908 | ) | (386,305 | ) | ||
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| 2008 | 2007 | |||||
| RMB’000 | RMB’000 | |||||
| (Unaudited) | (Unaudited) | |||||
| Cash flows from financing activities: |
||||||
| Proceeds from borrowings |
22,273,828 | 11,927,838 | ||||
| Sub-total of cash inflows |
22,273,828 | 11,927,838 | ||||
| Repayment of borrowings |
(18,321,899 | ) | (12,874,756 | ) | ||
| Cash paid for dividends, profit distribution and interest |
(751,199 | ) | (508,721 | ) | ||
| Sub-total of cash outflows |
(19,073,098 | ) | (13,383,477 | ) | ||
| Net cash inflow/(outflow) from financing activities |
3,200,730 | (1,455,639 | ) | |||
| Effect of foreign exchange rate changes on cash and cash equivalents |
(1,186 | ) | (1,917 | ) | ||
| Net (decrease)/increase in cash and cash equivalents |
(177,189 | ) | 174,614 | |||
| Add: Cash and cash equivalents at the beginning of the period |
893,165 | 894,650 | ||||
| Cash and cash equivalents at the end of the period |
715,976 | 1,069,264 | ||||
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| 4.4 | Cash Flow Statements (Unaudited) |
For the nine-month period ended 30 September 2008
Prepared under the China Accounting Standards for Business Enterprises (2006)
| 2008 | 2007 | |||||
| RMB’000 | RMB’000 | |||||
| (Unaudited) | (Unaudited) | |||||
| Cash flows from operating activities: |
||||||
| Cashed received from sale of goods and rendering of services |
54,722,512 | 41,647,691 | ||||
| Refund of taxes |
83,917 | — | ||||
| Other cash received relating to operating activities |
2,114,997 | 5,183 | ||||
| Sub-total of cash inflows |
56,921,426 | 41,652,874 | ||||
| Cash paid for goods and services |
(58,474,603 | ) | (37,232,719 | ) | ||
| Cash paid to and for employees |
(1,107,236 | ) | (979,219 | ) | ||
| Cash paid for all types of taxes |
(650,526 | ) | (1,152,935 | ) | ||
| Other cash paid relating to operating activities |
(256,212 | ) | (182,045 | ) | ||
| Sub-total of cash outflows |
(60,488,577 | ) | (39,546,918 | ) | ||
| Net cash (outflow)/inflow from operating activities |
(3,567,151 | ) | 2,105,956 | |||
| Cash flows from investing activities: |
||||||
| Cash received from disposal of investments |
120,001 | 583,558 | ||||
| Cash received from investment income |
531,042 | 669,690 | ||||
| Net cash received from disposal of fixed assets and intangible assets |
10,900 | 33,856 | ||||
| Other cash received relating to investing activities |
42,812 | 26,430 | ||||
| Sub-total of cash inflows |
704,755 | 1,313,534 | ||||
| Cash paid for acquisition of fixed assets and intangible assets |
(841,435 | ) | (1,587,414 | ) | ||
| Sub-total of cash outflows |
(841,435 | ) | (1,587,414 | ) | ||
| Net cash outflow from investing activities |
(136,680 | ) | (273,880 | ) | ||
| Cash flows from financing activities: |
||||||
| Proceeds from borrowings |
22,115,828 | 11,482,838 | ||||
| Sub-total of cash inflows |
22,115,828 | 11,482,838 | ||||
| Repayment of borrowings |
(17,982,924 | ) | (12,680,765 | ) | ||
| Cash paid for dividends, profit distribution and interest |
(643,901 | ) | (396,328 | ) | ||
| Sub-total of cash outflows |
(18,626,825 | ) | (13,077,093 | ) | ||
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| 2008 | 2007 | |||||
| RMB’000 | RMB’000 | |||||
| (Unaudited) | (Unaudited) | |||||
| Net cash inflow/(outflow) from financing activities |
3,489,003 | (1,594,255 | ) | |||
| Effect of foreign exchange rate changes on cash and cash equivalents |
(7 | ) | (56 | ) | ||
| Net (decrease)/increase in cash and cash equivalents |
(214,835 | ) | 237,765 | |||
| Add: Cash and cash equivalents at the beginning of the period |
634,533 | 551,693 | ||||
| Cash and cash equivalents at the end of the period |
419,698 | 789,458 | ||||
Legal representative of the Company: Mr. Rong Guangdao, Chairman and President
Officer overseeing accounting operations: Mr. Han Zhihao, Executive Director and Chief Financial Officer
Accounting chief: Mr. Zhou Meiyun
By order of the Board
Rong Guangdao
Chairman
Shanghai, the PRC, 29 October 2008
As at the date of this announcement, the executive directors of the Company are Rong Guangdao, Du Chongjun, Han Zhihao, Shi Wei, Li Honggen and Dai Jinbao; the non-executive directors of the Company are Lei Dianwu and Xiang Hanyin, and the independent non-executive directors of the Company are Chen Xinyuan, Sun Chiping, Jiang Zhiquan and Zhou Yunnong.
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Overseas Regulatory Announcement
Resolutions of the Fifth Meeting of the Sixth Session
of the Board of Directors
The Company and all members of the board of directors warrant that the information contained in this announcement is truthful, accurate and complete, and jointly and severally accept full responsibility for any false representation or misleading statements contained in, or material omissions from this announcement.
This announcement is issued pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
The directors were informed of the convening of the fifth meeting of the sixth session of the board of directors (the “Board”) of Sinopec Shanghai Petrochemical Company Limited (the “Company”) (the “Meeting”) via facsimile and mail on 15 October 2008. The Meeting was held on 29 October 2008 by means of correspondence. Of the 12 directors entitled to attend the Meeting, 12 of them attended the Meeting. The Secretary to the Board attended the Meeting, with observers from the supervisory committee members and senior management of the Company also attending the Meeting. The Meeting complied with the requirements of the Company Law of The People’s Republic of China and the articles of association of the Company. Mr Rong Guangdao, Chairman of the Company, presided over the Meeting. The Meeting considered and approved the following resolutions:
Resolution 1 The 2008 third quarterly report was considered and approved. The Secretary to the Board of the Company was authorized to submit the 2008 third quarterly report to The Stock Exchange of Hong Kong Limited, the Shanghai Stock Exchange and the New York Stock Exchange in accordance with the relevant requirements (with 12 votes in favor, 0 vote against, 0 abstention);
Resolution 2 The sale of the Longhua Freight Transfer Station (
), which is owned by the Company and located at No. 1 Fengxi Road, Shanghai (the “Property”), to the Land Development Centre, Xuhui District, Shanghai (
) and Shanghai Xuhui Riverside Development Investment and Construction Company (
) at a consideration of RMB96 million was considered and approved (with 12 votes in favor, 0 vote against, 0 abstention).
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The Longhua Freight Transfer Station (
), which is owned by the Company and located at No. 1 Fengxi Road, Shanghai, lies within the construction site area of the ancillary facilities for the World Expo 2010 at Xuhui District, Shanghai and is
subject to demolition. The Longhua Freight Transfer Station has a land area of 13,868.00 square meters, a licensed building area of 4,812.59 square meters and an unlicensed building area of 592.00 square meters. It has structures (such as pier and
yard) with an area of 10,147.88 square meters and is partly equipped with some facilities. The Property was evaluated by Shanghai Real Estate Appraisal Company Limited (
) at a value of RMB72.05 million (with net assets value of approximately RMB2.64 million as at 31 August 2008), and is now transferred at a consideration of RMB96 million as relocation compensation.
Sinopec Shanghai Petrochemical Company Limited
Shanghai, the PRC, 29 October 2008
As at the date of this announcement, the executive directors of the Company are Rong Guangdao, Du Chongjun, Han Zhihao, Shi Wei, Li Honggen and Dai Jinbao; the non-executive directors of the Company are Lei Dianwu and Xiang Hanyin, and the independent non-executive directors of the Company are Chen Xinyuan, Sun Chiping, Jiang Zhiquan and Zhou Yunnong.
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Table of Contents
Expected Loss for the Annual Results of 2008
Sinopec Shanghai Petrochemical Company Limited (the “Company”) and all members of the board of directors warrant that the information contained in this announcement is true, accurate and complete, and that there are no false representations or misleading statements contained in, or material omissions from, this announcement.
This announcement is made pursuant to Rule 13.09(1) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the relevant regulations issued by the Shanghai Stock Exchange.
| I. | Estimates on the results |
| (1) | Period of estimates on the results: 1 January 2008 to 31 December 2008. |
| (2) | Estimates on the results: The Company estimated that the Company and its subsidiaries (the “Group”) will incur a significant loss for its net profit attributable to equity shareholders of the Company for the year of 2008. |
| (3) | The estimated results are not reviewed or audited by any certified accountants. |
| II. | Results for the corresponding period of the previous year |
| Under the China Accounting Standards for Business Enterprises | ||
| Net profit attributable to equity shareholders of the Company (RMB’000) |
1,592,110 | |
| Earnings per share (RMB) |
0.221 |
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| III. | Reason |
From January 2008 to July 2008, the crude oil costs of the Company surged substantially as international crude oil prices soared continuously. Prices of refined oil products and crude oil were seriously inverted as a result of the Government’s stringent control over the domestic prices of refined oil products, which led to a severe loss in the Company’s oil refining operation. Since July 2008, following the rapid drop in international crude oil prices coupled with the worsening impact of the international financial crisis on the industry, consumption and market demand for downstream petrochemical products had dropped, which led to a substantial decline in the prices of petrochemical products. It takes time for the Company to absorb the cost of the crude oil and intermediate raw materials which it had purchased at high prices. At the same time, the Group received a substantially reduced amount of financial subsidies for its oil refining operation during the third quarter of the year, and at present, the Company is not aware of whether it will continue to receive financial subsidies for its oil refining operation in the fourth quarter of the year. In view of the above, the Company expects the Group to incur a significant loss in net profit for the twelve-month period ending 31 December 2008.
Investors are advised to pay attention to the risks involved in the investment in the Company’s securities.
Sinopec Shanghai Petrochemical Company Limited
Shanghai, the PRC, 29 October 2008
As at the date of this announcement, the executive directors of the Company are Rong Guangdao, Du Chongjun, Han Zhihao, Shi Wei, Li Honggen and Dai Jinbao; the non-executive directors of the Company are Lei Dianwu and Xiang Hanyin, and the independent non-executive directors of the Company are Chen Xinyuan, Sun Chiping, Jiang Zhiquan and Zhou Yunnong.
25