Mainland polyurethane distributor Sino Union Petroleum and Chemical International reported a sevenfold increase in its interim profit due largely to the sale of one of its petrochemical plants.
'We found that the margins for petrochemical products are getting thinner and are likely to go into the red after July caused by the disparity in the price of crude oil and refinery products. Thus we decided to dispose it,' said Fu Wing-kwok, company secretary of Sino Union.
The manufacturing plant for propane - a colourless, flammable gas that is widely used by industry to make organic chemicals, including polypropylene plastics - could process 300,000 tonnes of crude oil per year producing other products such as diesel fuel and petrol.
As the prices of refinery products are controlled by the government and cannot reflect soaring crude prices, the propane complex barely broke even in the month ending June this year. Mr Fu said the company decided to sell the plant because of looming looses on production of diesel and petrol.
The sale increased turnover to $300 million against $248 million from the same period last year, while operational profit jumped seven times to $19.57 million. Earning per share increased by 26.7 times to 1.11 cents from 0.04 cent. No dividend was recommended.
