SINOSTAR PEC HOLDINGS LIMITED (Company Registration No.: N)

Transcription

1 SINOSTAR PEC HOLDINGS LIMITED (Company Registration No.: N) UNAUDITED FINANCIAL STATEMENT FOR THE FIRST QUARTER ENDED 31 MARCH 2016 PART I INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF YEAR AND FULL YEAR RESULTS 1(a) An income statement and statement of comprehensive income or a statement of comprehensive income for the group together with a comparative statement for the corresponding period of the immediately preceding year. Consolidated statement of comprehensive income for the 1 st quarter for the period ended 31 March /3/ /3/2015 Change +/(-) RMB 000 RMB 000 % Revenue 329, , Cost of sales (314,855) (261,915) 20 Gross profit 14,342 14,861 (3) Other income 1,573 1,473 7 Distribution costs (1,061) (1,510) (30) Administrative costs Other operating expense (2,877) (12) (2,321) (8) Profit before taxation 11,965 12,495 (4) Taxation (503) Total comprehensive profit for the period/total comprehensive income attributable to equity holders of the group 11,462 12,495 (8) Page 1 of 15

2 Notes to the consolidated statement of comprehensive income 31/3/ /3/2015 Change (+/-) RMB 000 RMB 000 % Profit before taxation is arrived at after (crediting)/charging: Other operating income included;- - Interest income (1,573) (1,473) 7 Depreciation of property, plant and equipment 2,963 2, N.M. Not meaningful Page 2 of 15

3 1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year. GROUP COMPANY 31/3/ /12/ /3/ /12/2015 RMB 000 RMB 000 RMB 000 RMB 000 ASSETS NON-CURRENT ASSETS Property, plant and equipment 92,529 88,394-8 Goodwill 2,501 2, Subsidiary , ,041 95,030 90, , ,049 CURRENT ASSETS Inventories 7,341 19, Trade and other receivables 27,847 60, Amount owing by a subsidiary ,391 25,836 Amount owing by affiliated companies Cash and bank balances 6, ,066 22, ,559-2, , ,046 25,270 25,879 TOTAL ASSETS 613, , , ,928 EQUITY Equity attributable to owners of the company Share capital 316, , , ,125 Retained profits/(accumulated losses) 193, ,335 (41,434) (41,062) Reserves 43,263 43, TOTAL EQUITY 553, , , ,063 LIABILITIES CURRENT LIABILITIES Trade and other payable 57,407 55, Amount owing to affiliated companies 2,043 56, Current tax payable 503 1, , , TOTAL EQUITY AND LIABILITIES 613, , , ,928 Page 3 of 15

4 1(b)(ii) Aggregate amount of group s borrowings and debt securities. Amount repayable in one year or less, or on demand As at 31/3/2016 As at 31/3/2015 Secured Unsecured Secured Unsecured RMB 000 RMB 000 RMB 000 RMB Amount repayable after one year As at 31/3/2016 As at 31/3/2015 Secured Unsecured Secured Unsecured RMB 000 RMB 000 RMB 000 RMB Details of any collateral N.A. Page 4 of 15

5 1(c) A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year. Consolidated statement of cash flows for the period ended 31 March /3/ /3/2015 RMB 000 RMB 000 Cash flows from operating activities Profit for the period 10,660 12,495 Adjustments for:- Depreciation of property,plant and equipment Interest income 2,963 (1,573) 2,482 (1,473) Operating profit before working capital changes 13,355 13,504 Changes in working capital: Decrease in inventories 11,995 9,303 Decrease in operating receivables 49,754 34,791 (Decrease)/increase in operating payables (52,656) 3,871 Cash generated from operations Income tax paid 22,448 (1,111) 61,469 - Net cash generated from operating activities 21,337 61,469 Cash flows from investing activities Acquisition of property, plant and equipment Interest received (7,098) 268-1,473 Net cash (used in)/generated from investing activities (6,830) 1,473 Net increase in cash and cash equivalents 14,507 62,942 Cash and cash equivalents at beginning of year 461, ,954 Cash and cash equivalents at end of year 476, ,896 For the purpose of the consolidated statement of cash flows, the cash and cash equivalents comprise the following: Cash on hand Bank balances Fixed deposit placed with financial institutes 125, , , , , ,896 Page 5 of 15

6 1(d) (i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalization issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. Share Retained Statutory common Voluntary common capital profits reserve welfare fund subtotal Total 1 January 2015 to 31 March 2015 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 Balance as at 1 January , ,257 40, , ,988 Total comprehensive income for the period - 12, ,495 Transfer to statutory common reserve Balance as at 31 March , ,752 40, , ,483 Other reserves Share Retained Statutory common Voluntary common capital profits reserve welfare fund subtotal Total 1 January 2016 to 31 March 2016 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 Balance as at 1 January , ,335 42, , ,723 Total comprehensive income for the period - 11, ,463 Transfer to statutory common reserve Balance as at 31 March , ,798 42, , ,186 Page 6 of 15

7 UNAUDITED STATEMENT OF CHANGES IN EQUITY - COMPANY 1 January 2015 to 31 March 2015 Share Capital Accumulated losses Total RMB'000 RMB'000 RMB'000 Balance as at 1 January ,125 (35,640) 280,485 Total comprehensive expense for the period - (2,494) (2,494) Balance as at 31 March ,125 (38,134) 277,991 1 January 2016 to 31 March 2016 Share Capital Accumulated losses Total RMB'000 RMB'000 RMB'000 Balance as at 1 January ,125 (41,062) 275,063 Total comprehensive expense for the period - (372) (372) Balance as at 31 March ,125 (41,434) 274,691 Page 7 of 15

8 1(d) (ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. There were no outstanding convertibles issued or treasury shares held by the Company as at 31 December There were no changes in the Company s share capital during the current financial year reported on. 1(d) (iii) Total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year. Company 31/3/ /3/2015 Total number of issued shares (excluding treasury shares) 640,000, ,000,000 1(d) (iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on. 2 Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice. The figures have not been audited or reviewed by the auditors. 3 Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of matter). 4 Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied. The Group had applied the same accounting policies and methods of computation in the financial statements for the current financial period as those adopted in the audited financial statement for the financial year ended 31 December If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change. There is no change in accounting policies and methods of computation since 31 December Page 8 of 15

9 6 Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends. 1 st Quarter ended 31/3/ st Quarter ended 31/3/2015 RMB (cents) RMB (cents) Profit per share for the period based on net profit attributable to owners of the parent company (a) Based on basic number of ordinary shares on issue No. of shares in issue 640,000, ,000,000 (b) On a fully diluted basis No. of shares in issue 640,000, ,000,000 7 Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the (a) current financial period reported on and (b) immediately preceding financial year. Group Company 31/3/ /12/ /3/ /12/2015 RMB RMB RMB RMB Net asset value per ordinary share No. of share in issue 640,000, ,000, ,000, ,000,000 8 A review of the performance of the group, to the extent necessary for a reasonable understanding of the group s business. The review must discuss any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on. Analysis of Revenue 1st Qtr 1st Qtr ( in RMB'000) 2016 % 2015 % Processed LPG 176, % 172, % Propylene 55, % 32, % Polypropylene 53, % 71, % Transportation services 44, % - 0.0% TOTAL 329, % 276, % (a) Processed LPG Revenue generated from the sale of processed LPG increased by 1.9% from RMB million in 1Q15 to RMB million in 1Q16. The increase is mainly attributes to 32.5% increase in output Page 9 of 15

10 produced and sold during the 1Q16 period as compare to 1Q15. However, both the average selling price ( ASP ) and average cost of sales ( ACOS ) decrease by 23.1% and 20.7% respectively. (b) Propylene Sale of propylene increase by 74.3% from RMB 32.0 million in 1Q15 to RMB 55.7 million in 1Q16. Increases is due to higher volume produced and sold during the period, an increase of 156.8% as compared to 1Q15. However, both the ASP and ACOS for propylene also decrease by 32.2% and 33.4% respectively. Domestic propylene market still experienced lower pricing competition from the imported propylene. (c) Polypropylene Revenue of polypropylene decrease by 26.1% from RMB 71.8 million in 1Q15 to RMB 53.1 million in 1Q16. Both ASP and ACOS also decrease by 24.9% and 27.4% respectively. Gross profit Due to the abovementioned, gross profit decreases by 3.5% from RMB 14.8 million in 1Q15 to RMB 14.3 million in 1Q16. Other income and expenses (a) Other income Increase of fixed amount placed with the financial institutions resulted in higher interest accrued for the periods; (b) Administration expenses/distribution cost Increase was due mainly to the consolidation of expenses and costs from the transportation services providing subsidiaries; (c) Taxation Provision of tax is mainly from the profit generated by Dongming Changshun Transport Co., Ltd.. As a result, the Group made a profit of RMB 11.5 million in 1Q16 as compared to RMB 12.5 million in 1Q15. Balance Sheet Highlights on changes in balance sheet items of the Group are as follows; - (a) Amount owing by affiliated companies consist mainly the outstanding amount of RMB 5.5 million for finished goods sold to Shandong Dongming Petrochem Group Hengji Chemical Company Limited ( ) and RMB 1.0 on the transportation services provided to Dongming RunMing Oil Products Distribution Co., Ltd ( ); (b) Current tax payable mainly attributed to the tax payable by subsidiary Dongming County Chang Shun Transport Co.,Ltd. Cash flow The Group s free cash flow increased to RMB 476 million in 1Q16 as compared to RMB million in Page 10 of 15

11 1Q15, mainly due to cash generated from operating activities. Update of IPO proceeds Balance as of 31 March 2016 is as follows:- RMB (million) Net IPO proceeds Equity contribution in subsidiary company (255.0) Capital injection into a subsidiary company ( 23.5) Balance as of 31 March 2016 NIL 9 Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results. None. 10 A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months. The global petrochemical industry glut is expected to continue and ongoing uncertainties has seriously affected the upstream Oil and Gas industry. This has in turn created challenges for the downstream petrochemical industry and the Group, in terms of lower average selling prices and lower average cost for LPG and the domestic propylene market experiencing lower price competition from imported propylene. Despite this difficult operating environment, the Group will continue to focus on expanding the business of transport and logistics business it acquired in July The Group remains undeterred by the challenging environment and believes that profitable growth still exists within the Group. The Board remains confident in Sinostar s growth strategy and with its strong balance sheet, which will allow the Group to be remain resilient for FY2016, supported by the growth in China s apparent demand for LPG and the development of the transport and logistic business. The Group will continue to focus on its long term strategy for sustainable progression and is confident of remaining profitable for FY2016, barring any unforeseen circumstances. 11 Dividend (a) Current Financial Period Reported On Any dividend recommended for the current financial period reported on? None. (b) Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? None. Page 11 of 15

12 (c) Date payable (d) Books closure date 12 If no dividend has been declared/recommended, a statement to that effect. 13 If the Group has obtained a general mandate from shareholders for IPTs, the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPT mandate has been obtained, a statement to that effect. Note Rule 920(1)(a)(ii) An issuer must announce the aggregate value of transactions conducted pursuant to the general mandate (if any) for interested person transactions for the financial periods which it is required to report on pursuant to Rule 705. Name of Interested Person Aggregate value of all interested person transactions during the financial year under review (excluding transactions Aggregate value of all interested person transactions conducted during the financial year under review under less than $100,000 and shareholders mandate transactions conducted under pursuant to Rule 920 shareholders pursuant to Rule 920) mandate (excluding transactions less than $100,000) For periods between January 2016 to March 2016:- Dongming Zhongyou Fuel and Petrochemical Company Limited ( ) - Purchase of raw LPG; - Prepayment for raw materials - Payment of utilities supplied - Sale of transportation services RMB 244,438,853 RMB 80,000,000 RMB 1,317,461 RMB 639,479 Shandong Dongming Petrochem Group Co., Ltd. ( ) - Payment of utilities supplied - Sale of processed LPG - Sale of transportation services RMB 5,063,810 RMB 10,330,937 RMB 74,679 Page 12 of 15

13 Shandong Dongming Petrochem Group Hengji Chemical Company Limited ( ) - Sales of processed LPG RMB 5,298,560 Dongming Runze Petrochemical Co., Ltd ( ) - Purchase of utilities supplied Dongming RunMing Oil Products Distribution Co., Ltd ( ) - Sale of transportation services RMB 4,013,286 RMB 1,089,803 Dongming Crude Oil Distribution Co., Ltd ( ) - Sale of transportation services RMB 1,203,133 The Company had in its extraordinary general meeting ( EGM ) held on 16 July 2014 obtained shareholders approval for the adoption of a general interested party transaction ( IPT ) mandate ( 2014 IPT Mandate ) to enter into certain recurrent transactions with Shandong Dongming Petrochem Group Co., Ltd and certain categories of its companies, corporations and entities (collectively, Dongming Petrochem Group ). Details of the 2014 IPT Mandate and Dongming Petrochem Group are set out in the Company s circular to its shareholders dated 1 July It has come to the attention of the Company that it had inadvertently omitted to seek its shareholders approval for the renewal of the 2014 IPT Mandate at its annual general meeting held on 27 April 2015, and accordingly, the 2014 IPT Mandate has lapsed. The past IPTs with Dongming Petrochem Group, which have occurred after the 2014 IPT Mandate has lapsed, were carried out without any shareholders mandate. The Company will be convening an EGM to seek a specific approval from its shareholders to approve and ratify these past IPTs with Dongming Petrochem Group. A circular to the shareholders, containing, inter alia, details of such past IPTs with Dongming Petrochem Group will be dispatched by the Company to the shareholders in due course 14. NEGATIVE CONFIRMATION BY THE BOARD PURSUANT TO RULE 705(5) PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT (This part is not applicable to Q1, Q2, Q3 or Half Year Results) 15 Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer s most recently audited annual financial statements, with comparative information for the immediately preceding year. 16 In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments. Page 13 of 15

14 17 A breakdown of sales. 18 A breakdown of the total annual dividend (in dollar value) for the issuer s latest full year and its previous full year. 19 Disclosure of person occupying a managerial position in the issuer or any of its principal subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the issuer pursuant to Rule 704(11) in the format below. If there are no such persons, the issuer must make an appropriate negative statement. Name Age Family relationship with any director and/or substantial shareholder Not applicable Current position and duties, and the year the position was held Details of changes in duties and position held, if any, during the year BY ORDER OF THE BOARD ZHANG LIU CHENG CEO AND EXECUTIVE DIRECTOR Page 14 of 15

15 CONFIRMATION BY THE BOARD PURSUANT TO RULE 705(5) OF THE SGX-ST LISTING MANUAL We, Li Xiang Ping and Zhang Liu Cheng, being Directors of the Company, do hereby confirm for and on behalf of the Board of Directors of the Company that, to the best of our knowledge, nothing has come to the attention of the Board of Directors of the Company which may render the unaudited financial results for the first quarter ended 31 March 2016 to be false or misleading in any material aspect. On behalf of the Board of Directors Sinostar PEC Holdings Limited Li Xiang Ping Executive Director Zhang Liu Cheng Executive Director BY ORDER OF THE BOARD ZHANG LIU CHENG CEO AND EXECUTIVE DIRECTOR 11 May 2016 Page 15 of 15