Hong Kong’s Zenith Chemical H2 profit up 56%

19 March 2008 02:46  [Source: ICIS news]

SINGAPORE (ICIS news)--Zenith Chemical posted a 56.2% rise in its second-half operating profit on strong polyvinyl chloride (PVC), vinyl acetate and biochemical sales, the Hong Kong-based company said late on Tuesday.

Its operating profit for the six months ended 31 December 2007 rose to Hong Kong dollar (HK$) 169.2m ($21.8m) from HK$108.3m in the same period a year ago while revenue doubled to HK$851.3m, the company, formerly Daqing Petroleum and Chemical Group, said in a statement.

The company’s PVC segment nearly doubled its operating profit during the same period to HK$130.4m as the company increased sales and adjusted production to making emulsion PVC. The segment’s turnover increased 81.7% to HK$445.5m.

Operating profit at its vinyl acetate segment rose 53.3% to HK$71.1m while turnover rose 58.3% to HK$223.5m, the company said. Zenith increased its sales volume and reduced the average cost of production after completing an expansion in July last year.

Its biochemical division returned to profit in the second half of 2007 as the company increased glucose and starch production, Zenith said. The segment posted an operating profit of HK$1.8m with turnover of HK$151.2m.

Coal and electricity costs were expected to rise this year as the government planned to abolish all preferential electricity tariff given to high-energy consumption plants and was also becoming more stringent in pollution control, Zenith said.

To minimise the cost impact, the company has started building its own calcium carbide plant to feed its PVC production and it planned to widen its product mix by producing different types of emulsion PVC.

($1 = HK$7.76)

By: Florence Tan
+65 6780 4359

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