Improved sales of domestically produced fertiliser offset sharp drop in revenue from imported products
Sinochem Hong Kong Holdings, China's largest fertiliser distributor, posted a 19.4 per cent rise in first-half net profit, as increased sales of domestically produced nitrogenous products more than offset a sharp drop in imported potassium fertiliser sales caused by prolonged negotiations with overseas suppliers.
The Beijing-based company, a unit of state-owned oil and petrochemical firm Sinochem Group, reported a first-half net profit of HK$465.32 million, up from HK$389.71 million in the same period last year. The year-earlier period figure was calculated on a pro-rata basis from the HK$586.91 million January-to-September figure actually reported to Hong Kong stock exchange by the company last year when it changed its financial year-end to December 31 from March 31.
Also using a pro-rata comparison from a year earlier, when the company was back-door listed in Hong Kong, half-year turnover rose at a slower 7.07 per cent to HK$10.3 billion.
The growth was due to a 10.04 per cent rise in total sales volume to 6.14 million tonnes, of which a 62 per cent rise in domestic fertiliser to 3.27 million tonnes more than made up for a 23 per cent fall in imported fertiliser to 2.46 million tonnes.
A trade halt during an eight-month negotiation with foreign suppliers caused the seaborne import volume of potassium fertiliser to plunge 32.8 per cent to 790,000 tonnes. 'The negotiation standstill meant trade was completely frozen in the first half,' said Sinochem Hong Kong chief executive Du Keping.