Jilin Chemical Industrial Company Limited Announces 2004 Interim Results

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Elements DB China	NYSE:JCC	NYSE	Ordinary Share

Jilin (NYSE:JCC)
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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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