Financial Highlights (Unaudited):

(Hong Kong, 29 August 2010) China BlueChemical Ltd. (“China BlueChem” or the “Company”; stock code: 3983), a leading chemical fertiliser producer in China, today announced its unaudited interim results for the six months ended 30 June 2010.

During the review period, benefited from the Central Government’s agriculture-friendly policies, the Company’s revenue increased by 4.5% to RMB2,955 million. Gross profit rose 6.0% to RMB911.3 million. Net profit attributable to owners of the parent was RMB533.3 million. Basic earnings per share were RMB0.12.

Mr. Yang Ye Xin, CEO and President of the Company, said, “During the first half of 2010, the chemical fertiliser market was relatively weak due to inclement weather conditions for planting and raising crops in certain areas of the country. In achieving the steady growth of operating results, the Company overcame the adverse market environment of rising raw material prices and natural disasters, which depressed market demand, by undertaking longer operating cycles and reducing repair and maintenance expenses of its production plants. In addition, the strong demand from traditional downstream application and alternative energy has driven methanol consumption. During the period under review, the Company recorded steadily rising revenue in the methanol business segment.”

The urea segment remained the Company’s core business. The Company ensured the safe and stable operation of its major existing plants by strengthening the management of the main production facilities. Production and sales volume of urea were 1,003,197 tonnes and 910,029 tonnes respectively, and the average utilisation rate of the three urea plants was 109.0%. The Company’s revenue of urea was RMB1,506.2 million, a decrease of RMB122.7 million for the corresponding period of 2009, which was primarily attributable to the bad weather which led to a decrease in demand of urea over the same period in 2009 and a decline in the price of urea.

In the first half of 2010, the imported volume of methanol retreated significantly as compared to the corresponding period of 2009. In the domestic market, rising sales prices and sales volume contributed to the increase of methanol related revenue by 38.4% over the corresponding period in the previous year, reaching RMB735 million. The production and sales of methanol was 397,154 tonnes and 401,997 tonnes respectively.

In addition, the production and sales of phosphate fertiliser was 244,132 tonnes and 212,072 tonnes respectively. The average utilisation rate of the two phosphate plants hit a record high of 97.7%. Revenue amounted to RMB514 million, RMB8.0 million less than the corresponding period of 2009. The reduction in revenue was mainly attributable to the lower selling price of phosphate fertiliser. However, the rise in sales volume of phosphate fertiliser partly offset the adverse effect of the reduction in revenue. 

Seizing mergers and acquisition opportunities to boost its business, the Company acquired 80% equity interest in Hegang Huahe Coal Chemical Ltd. in Hegang City, Heilongjiang Province. The Company will utilise the coal resources acquired to construct a coal and urea production base integrating its upstream and downstream businesses. This new production base will further enhance the Company’s urea production capacity and cost competitiveness. In addition, this urea production base is located within the prime regions for crop production in northeastern China, optimising the location of the Company’s fertilizer production facilities. Within the same month, the Group has increased its equity interest in Guangxi Fudao Agricultural Means of Production Limited. The Company has also taken advantage of its sales network to boost the competitiveness of our products elsewhere in China.

Mr. Yang concluded: "Looking ahead, the agriculture-friendly policy of the Central Government will spark a steady rise in the demand of fertiliser which strengthens the confidence of the Company to raise revenue. In addition, the increase in the well head price benchmarks of natural gas will force the weaker fertiliser producers to shut down, thus lead to the industry consolidation. This will present favourable opportunities to domestic large-scale chemical fertiliser producers. As one of the largest nitrogenous fertiliser producers in China in terms of production volume, we intend to take advantages of our strong cash position, talent, favourable geographic location, and leading technology to further implement our integrated development strategies. We aim to actively expand our production scale and further integrate our distribution network. Moreover, we are striving to make full use of the longer low tariff export window for fertilisers and expand our market share by tapping market and acquisition opportunities in line with our business strategy. 

 

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About China BlueChemical Ltd.
China BlueChem is one of the largest nitrogenous fertiliser producers in China in terms of production volume. It is a listed company under China National Offshore Oil Corp. that engages in the production of downstream mineral fertilisers and synthetic chemical products. Currently, China BlueChem’s production facilities are located in Hainan, Inner Mongolia and Hubei, China, with a total designed annual production capacity of 1,840,000 tonnenes of urea, 800,000 tonnenes of methanol and 500,000 tonnenes of phosphate fertiliser (DAP/MAP).

For press enquiries：
China BlueChemical Ltd.
Ms. Lydia Zhong  Tel: (852) 22132502  zhongyx@cnooc.com.cn

Strategic Financial Relations (China) Limited
Ms. Arlene Wong  Tel: (852) 2864 4899 / 9233 2926   arlene.wong@sprg.com.hk
Ms. Cathy Zhang  Tel: (852) 2114 4963 / 9660 2952  cathy.zhang@sprg.com.hk
Ms. Ada Ho     Tel: (852) 2114 4954 / 9240 8639  ada.ho@sprg.com.hk
Ms. Alice Kwok   Tel: (852) 2864 4838 / 9759 9921  alice.kwok@sprg.com.hk