Jilin Chemical Industrial Company Limited Announces 2004 Interim
Results JILIN CITY, China and HONG KONG, July 28
/Xinhua-PRNewswire-FirstCall/ -- Jilin Chemical Industrial Company
Limited (the "Company") (NYSE: JCC; HKSE: 0368) announced its
unaudited results for the six months ended June 30, 2004, prepared
under the International Financial Reporting Standards. Turnover for
the six months ended June 30, 2004 was approximately RMB13,730
million (approximately US$1659 million) representing an increase of
147.9 per cent as compared with the first six months of 2003. Net
profit amounted to approximately RMB606 million (approximately
US$73 million). Earnings per share for the six months ended June
30, 2004 was RMB0.17 (approximately US$0.02). The board of
directors of the Company has resolved not to declare any interim
dividend for the six months ended June 30, 2004. During the first
half of 2004, guided by the principles set down at the beginning of
the year, that is, "strict and micro management", the Company
ensured that the work safety and implementation of its goal was its
principal responsibility. The Company seized the opportunity
afforded by a rise in the price of its products, to further enlarge
production output and sales and strengthen financial management.
Together with the reduction in costs, the Company has been able to
succeed in various projects and the Company's profile have
continued to rise and the major technical and economic targets have
reached their historical high. For the first half of 2004, in
accordance with PRC GAAP, actual realized sales revenue from the
sale of the Group's petroleum products was RMB6,431.75 million,
which accounted for 51% of the revenue from principal business
activities and the requisite cost of sales was RMB6,132.24 million,
with a gross profit margin of 5%; actual realized sales revenue
from the sale of petrochemical and organic chemical products was
RMB5,062.35 million, which accounted for 40% of the revenue from
principal business activities and the requisite cost of sales was
RMB3,925.91 million, with a gross profit margin of 22%. Under IFRS,
realized sales actual revenue from the sales of the Group's
petroleum products was RMB6,212.55 million which accounted for 45%
of the revenues; realized sales actual revenue from the sales of
petrochemical and organic chemical products was RMB5,493.96 million
which accounted for 40% of the revenues. During the second half of
2004, the Company shall follow the overall arrangements and rate of
progress set down at the beginning of the year, overcoming all
adverse factors and ensuring the further implementation of various
projects. To achieve this, the Company is fully committed to
strengthen its safe production management methods so as to ensure
its production facilities run safely, reliably and at full
capacity. The Company shall ensure that all hidden dangers be
eliminated and further improve production methods, product mix and
capital resources through the observance of market forces. The
Company shall optimize the allocation of resources; secure the
procurement of raw materials and fuel in large quantities (which
include crude oil, Russian crude oil and coal) in order to ensure
maximum economies of scale, and further enhance efficiency and
development potentials. The Company aims to maximize both the
national and overseas resources, to expand the size of its market
and raise the competitiveness of its products. Through
strengthening of its financial management and strictly implementing
its internal controls for financial management purposes, the
Company aims to further reduce the proportion of interest bearing
borrowings and efficiently deploy its capital. The Company expects
the processing capacity for crude oil to reach over 3 million tons
in the second half of 2004. Subject to crude oil prices not
increasing at a significant level and the petrochemical market
remaining relatively stable, the Company shall endeavour to
increase its profiles to 200% to 250% for the nine months ending
September 30th, 2004 as compared to the same period in 2003. * In
this statement, amounts in Renminbi have been converted into United
States dollars at the rate of US$1.00=RMB8.2766, as announced by
the People's Bank of China as of June 30, 2004. For further
information, please contact: Mr. Li Chunqing Tel: (86) 432-390 3651
Jilin Chemical Industrial Company Limited Fax: (86) 432-302 8126
E-mail: Ms. Gladys Lee Tel: (852) 2838 1162 Fortune China Public
Relations Ltd. Fax: (852) 2834 5109 E-mail: Unaudited Consolidated
Interim Condensed Profit And Loss Account (Prepared under IFRS) For
The Six Months Ended 30th June, 2004 (RMB thousands except for per
share data) Six months ended 30th June, 2004 2003 Notes RMB RMB
Turnover 2 13,729,975 9,282,866 Cost of sales (12,615,949)
(8,527,355) Gross profit 1,114,026 755,511 Distribution costs
(16,076) (14,910) Administrative expenses (306,330) (253,128) Other
operating expenses, net (62,364) (6,629) Operating profit 3 729,256
480,844 Interest expense 4 (152,934) (236,587) Interest income 585
2,606 Exchange loss (3,892) (8,632) Exchange gain 6,926 548 Share
of profit of a jointly controlled entity 12,559 2,825 Share of
profit/(loss) of an associated company 1,005 (223) Profit before
taxation 593,568 241,381 Taxation -- -- Profit before minority
interests 593,568 241,381 Minority interests 12,786 1,462 Profit
attributable to shareholders 606,354 242,843 Basic and diluted
earnings per share 5 RMB 0.17 RMB 0.07 Dividend 6 -- -- Notes To
The Unaudited Consolidated Interim Condensed Financial Statements
For The Six Months Ended 30th June, 2004 (Amounts in thousands
unless otherwise stated) 1. Accounting Policies The unaudited
consolidated interim condensed financial statements are prepared in
accordance with IAS 34 "Interim Financial Reporting". The
accounting policies used in the preparation of the consolidated
interim condensed financial statements are consistent with those
used in the preparation of the financial statements for the year
ended 31st December, 2003. Costs that incur unevenly during the
financial year are anticipated or deferred in the interim report
only if it would also be appropriate to anticipate or defer such
costs at the end of the financial year. Income tax expense is
recognised based on the best estimate of the weighted average
annual income tax rate expected for the full financial year. The
estimated weighted average annual tax rate used for the six-month
period from 1st January, 2004 to 30th June, 2004 is 33% (the
estimated weighted average tax rate used for the six-month period
from 1st January, 2003 to 30th June, 2003 was 33%). The Group did
not recognize deferred income tax assets in respect of tax losses
at this point of time because management did not think it is
probable that taxable profits will be available against which the
deferred tax asset can be utilized. These unaudited consolidated
interim condensed financial statements should be read in
conjunction with the 2003 annual financial statements where the
accounting policies are described in more detail. The results of
operation for the six months ended 30th June, 2004 are not
necessarily indicative of the results to be expected for the full
year ending 31st December, 2004. 2. Segment Information Six months
ended 30th June, 2004 Petro- Chemical chemical fertilisers Other
and organic and Synthetic products Petroleum chemical inorganic
rubber and products products products products services Total RMB
RMB RMB RMB RMB RMB Revenues 6,212,553 5,493,959 616,306 800,349
606,808 13,729,975 Segment results (93,733) 818,966 (91,967)
172,965 (76,975) 729,256 Finance costs, net (149,252) Share of
profit of a jointly controlled entity -- 12,559 -- -- -- 12,559
Share of profit of an associated company -- -- -- -- 1,005 1,005
Profit before taxation 593,568 Six months ended 30th June, 2003
Petro- Chemical chemical fertilisers Other and organic and
Synthetic products Petroleum chemical inorganic rubber and products
products products products services Total RMB RMB RMB RMB RMB RMB
Revenues 4,021,317 3,939,206 67,166 533,830 721,347 9,282,866
Segment results 26,321 369,918 (37,652) 137,885 (15,628) 480,844
Finance costs, net (242,065) Share of profit of jointly controlled
entities -- 2,825 -- -- -- 2,825 Share of loss of an associated
company -- -- -- -- (223) (223) Profit before taxation 241,381 All
assets and operations of the Group are located in the PRC, which is
considered as one geographic location in an economic environment
with similar risks and returns. Accordingly, no geographic segment
information is presented. 3. Operating Profit The following items
have been charged/(credited) to operating profit during the period:
Six months ended 30th June, 2004 2003 RMB RMB Depreciation of
property, plant and equipment 501,375 449,636 Loss on disposal of
property, plant and equipment 34,158 1,200 Provision for impairment
of property, plant and equipment 19,814 -- Provision for impairment
of intangible assets 6,698 -- Provision for impairment of
receivables (included in "administrative expenses") 22,533 31,859
Provision/(reversal) of diminution in value of inventories 79,169
(393) Amortisation of intangible assets 61,562 39,048 Research and
development expenditure 192 1,200 Employee compensation costs
497,520 310,800 Operating lease rentals on land and buildings 4,320
5,251 Repair and maintenance 304,285 131,981 4. Interest Expense
Six months ended 30th June, 2004 2003 RMB RMB Interest expense
152,934 260,022 Less: Amount capitalised -- (23,435) 152,934
236,587 5. Basic And Diluted Earnings Per Share Basic and diluted
earnings per share for the six months ended 30th June, 2004 have
been computed by dividing the profit attributable to shareholders
of RMB 606,354 (2003: profit attributable to shareholders of RMB
242,843) by the number of 3,561,078,000 shares issued and
outstanding for the period. 6. Dividend The directors do not
recommend the payment of an interim dividend for the six months
ended 30th June, 2004 (2003: nil). DATASOURCE: Jilin Chemical
Industrial Company Limited CONTACT: Mr. Li Chunqing of Jilin
Chemical Industrial Company Limited, +86-432-390-3651, or fax:
+86-432-302-8126, ; or Ms. Gladys Lee of Fortune China Public
Relations Ltd., +852-2838-1162, or fax: +852-2834-5109,
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