China BlueChem posts first quarter profit at CNY1bn

The company’s sales volume of primary products – such as urea, phosphate fertilizers and methanol – have all hit record highs.

China BlueChemical Ltd. (“China BlueChem”), a leading chemical fertilizer producer in China, on Sunday announced its unaudited interim results for the six months ended 30 June 2011, according to a China BlueChem report.

During the reporting period, the Chinese Government continued to increase investment in agriculture, rural areas and farmers as part of a policy to strengthen the agricultural industry. Against this backdrop, the Group’s revenue surged 61%, compared to the corresponding period of 2010 to RMB4,757 million as sales volumes reached record highs. Gross profit climbed dramatically 86.2% over the corresponding period of 2010 to RMB1,697 million. Net profit attributable to owners of the parent was RMB1,030 million and the basic earnings per share were RMB0.22.

Mr. Yang Yexin, CEO and President of the Company, said, “During the first half year of 2011, the Chinese economy enjoyed steady growth, and demand for fertilizer and methanol was vigorous. The Company has achieved a sound sales performance through proactive market research, market-responsive tracking and active logistics coordination. During the reporting period, the Hainan Phase II methanol plant with a production capacity of 800,000 tons have been running smoothly, and the sales volume of the Company’s primary products, urea, phosphate fertilizers and methanol have all hit record highs.”

With the steady growth of Chinese economy and the promotion of alternative sources of energy, the domestic demand for methanol continued its strong growth. Riding on the opportunity of increasing prices of methanol, the company carefully organizes its major production and strengthening safety management. Hainan Phase I and Phase II Methanol Plants both fulfilled long-term operation. In the fourth quarter of 2010, Hainan Phase II methanol plants with a production capacity of 800,000 have commenced production, enabling the company to achieve production and sales volume of 821,164 tons and 777,678 tons respectively, a year-on-year surge of 107% and 94% respectively. The revenue of the methanol business substantially increased to RMB1,682 million, a year-on-year rise of 129%.

Mr. Yang concluded: "Looking ahead, the Chinese Government will continue refining its policy on strengthening and benefiting the agricultural industry, and steadily increase the grain supply, which should further boost the increasing demand of fertilizer. During the second half of the year, the international demand for fertilizer will be expected to remain strong, and the fertilizer prices will remain high, as a result of export in the low season and winter fertilizers reserves. Demands for methanol will increase by the reasonable growth of the China’s economy and the promotion of the use of Methanol to Olefins and methanol fuel. The above elements create a good market environment for the Company in the second half of the year. Therefore, China BlueChem Limited will continue strengthening its production safety management and implement cost control measures. At the same time, the Company will actively advance construction of new production facilities, further integrate the sales network and seek qualified merger and acquisition opportunities. Riding on the advantage of its upstream and downstream integrated supply chain, the Company will consolidate its leading position in the industry, providing the maximum value for our shareholders”.