China BlueChemical Ltd. (“China BlueChem” or the “Company,” stock code: 3983), the largest state-owned chemical fertiliser producer and the leading methanol producer in China, announced its unaudited interim results for the six months ended 30 June 2022.
Financial Highlights (Unaudited):
For the Six Months Ended 30 June
(RMB Million) 2022 2021 Change
Revenue 7,371 6,110 +20.6%
Gross Profit 1,408 1,285 +9.6%
Net Profit Attributable to Owners of the Company 937 1,246 -24.8%
Net Profit Attributable to Owners of the Company (excluding a one-off item) 937 868 +8.0%
Basic Earnings per Share (RMB) 0.20 0.27 -25.9%
In the first half of the year, the Company realized a revenue of RMB 7,371 million, a surge of 20.6% over the corresponding period last year. Net profit attributable to owners of the Company amounted to RMB 937 million. In comparison with net profit attributable to owners of the Company after excluding a one-off item relating to Hualu Yangpoquan project for the first half of last year, which was RMB 868 million, the interim profit of this year is not only 8.0% higher than that of 2021, but also breaks the record of interim profits since 2013.
The Company consistently upholds the philosophy of green and sustainable development. In the first half of the year, the Company reduced 34 thousand tonnes of carbon emissions. It was the eleventh consecutive year that the Company had been awarded the Benchmark Enterprise of Leading Energy Efficiency in the Methanol Industry by China Petroleum and Chemical Industry Federation. Against the backdrop of “dual carbon” goals, the Company actively conducted research activities on the comprehensive utilisation of high carbon dioxide bearing natural gas and entered into a joint development agreement with BASF and Wuhuan Engineering, positioning itself as the first mover in the large-scale carbon dioxide utilisation.
Mr. HOU Xiaofeng, CEO and President of China BlueChem said, “In the first half of 2022, the Company implemented superb financial management without compromising social responsibility. It is encouraging that we reduced 34 thousand tonnes of carbon emissions and achieved a record high interim profit since 2013 after excluding the effect of one-off items in results in the comparison. As the largest state-owned chemical fertiliser producer and the leading methanol producer in China, China BlueChem firmly adheres to the principles of guarding against the pandemic, keeping the economy steady and achieving safe development. We have been fully boosting sales and marketing, enhancing production management, consistently controlling costs and raising efficiencies, and exploring price premium of our product brands.”
In the production perspective, the Fudao Phase I and Fudao Phase II urea plants completed their respective annual plant overhauls as scheduled with the required quality. The Hainan Phase I and Hainan Phase II methanol plants recorded the highest output volume for the corresponding period in the recent 5 years. In the first half of 2022, the Company produced 909 thousand tonnes of urea, 773 thousand tonnes of methanol, 522 thousand tonnes of phosphate fertilisers and compound fertilisers, and 5 thousand tonnes of polyformaldehyde (POM).
With regards to sales and marketing, the Company rode on the rising trend in prices of chemical fertilisers and chemical products to become the market leader in terms of methanol price and fully reap the market through strategic pricing of chemical fertilisers. It also enhanced the quality and scale of the self-operated business to realise its contribution to the sales value of the Company. In the first half of 2022, the Company sold 949 thousand tonnes of urea, 722 thousand tonnes of methanol, 515 thousand tonnes of phosphate fertilisers and compound fertilisers, and 3,484 tonnes of POM. Under the Company’s continued efforts in optimising the product portfolio, the sales volume of value-added products hit a record high, making a year-on-year increase of 73 thousand tonnes.
Regarding the progress of the Company’s key projects, the construction and pre-production preparation works of the acrylonitrile project were smoothly underway and the milestone targets were essentially achieved. The Company has been actively working on the acquisition of Orient Petrochemical and made substantive progress on the transfer of equity interests in DYK Chemical and CNOOC Tianye.
As for the industry outlook in the latter half of the year, the domestic demand is traditionally low in the third quarter, so the domestic urea market may possibly face significant price mark-downs, whereas there is a possibility that the urea market may bottom out and rally in the fourth quarter, causing concerns on the supply of natural gas and the scale of off-season stockings. Given the reduction in prices of main raw materials, the supply of phosphate fertilisers is expected to loosen up in the domestic market, which will exert a greater pressure on the domestic sales, and the prices will thereby start to go down with fluctuations along with the costs. As for methanol, the excessive supply over demand will persist. Dampened by deteriorating macro views, the market is expected to be weaker and will experience rocky adjustments. The POM market is expected to see a more adequate supply and the key concern will be whether the downstream demand can be restored.
In respect of the Company’s development in the latter half of the year, the Company will strictly implement prevention and control of normalised epidemic, and endeavour to achieve safe and stable operation for all production plants. It will strengthen the monitoring of equipment with potential dangers, reinforce the management, maintenance and overhauling of outdated equipment, and address bottleneck issues with consolidated technical skills. The Company will also further enhance its acumen in assessing the market, promote brand building and strive to gain a greater say in the market.
Looking to the future, Mr. HOU said, “China BlueChem has full confidence over its future. We will push the acrylonitrile project forward to ensure successful trial operation and get its production and sales well prepared. At the same time, we will speed up the construction of the petrochemical wharf with a throughput of 20 thousand tonnes in Xingang Zone of Basuo Port in Hainan Province. Furthermore, we will actively proceed with the acquisition of Orient Petrochemical, and complete the transfer of equity interests in DYK Chemical and CNOOC Tianye in a steady manner. Research activities on the technology of carbon-rich natural gas utilisation and the cooperation with BASF and Wuhuan Engineering will be accelerated, with the aim to facilitate the Company with more advanced technology of carbon fixation to promote green and low-carbon development.”
Topic: Press release summary