Sinopec's chemicals division sees a 33% fall in profits

Beijing - China Petroleum and Chemical Corp. (Sinopec) suffered a 33 percent half-year profit plunge in its chemicals division despite reporting a boost in revenues and an increase in output.

Sinopec's chemicals unit -- which manufactures synthetic rubber, as well as resins, fibres and polymers -- posted a profit of 7198 million yuan (€706 million) for the first six months of his year compared to 10 815 million yuan for the first half of 2005.

The division reported an 18 percent rise in half-year revenue to 101 519 million yuan but also a 25 percent increase in expenses to 94 321 million yuan.

The decreased profits for the division come despite an increase in half-year production of synthetic rubber by 3 percent to 318 000 tonnes, as well as in synthetic resins, fibres and polymers.

The Chinese conglomerate said it had reduced costs at its chemicals division by 351 million yuan.

''The company will start new facilities, fully exploit the newly added chemical production capacity and maintain full-load operations at major chemical facilities,'' a Sinopec statement said.

''The product mix will also be optimised, and the linkage between production and sales will be strengthened to produce more profitable and high-demand products so as to increase profitability. In addition, the company will fully utilise the newly established chemical sales company to improve its overall competitiveness.''

Across all its divisions, Sinopec posted a 15 percent rise in half-year net to 20 679 million yuan.