SPC(SH:600688)2015-03-22 16:00Financial Performance - The net loss attributable to shareholders for 2014 was RMB 716,427 thousand according to Chinese accounting standards, and RMB 692,222 thousand according to International Financial Reporting Standards[4]. - The company's operating revenue for 2014 was CNY 102,182,861 thousand, a decrease of 11.56% compared to CNY 115,539,829 thousand in 2013[23]. - The total profit for 2014 was a loss of CNY 914,149 thousand, representing a decline of 138.20% from a profit of CNY 2,392,870 thousand in 2013[23]. - The net profit attributable to shareholders for 2014 was a loss of CNY 716,427 thousand, down 135.76% from CNY 2,003,545 thousand in 2013[23]. - The company's net loss for the year was RMB 675.8 million, compared to a profit of RMB 2.0655 billion in 2013[60]. - The company's operating loss for 2014 was RMB 0.5879 billion, a decrease of RMB 2.7802 billion compared to an operating profit of RMB 2.1923 billion in the previous year, due to weak demand and falling prices in the petrochemical industry[75]. - The company's tax loss for 2014 was RMB 0.8799 billion, a decrease of RMB 3.3346 billion compared to a pre-tax profit of RMB 2.4447 billion in the previous year[83]. - The company's net cash inflow from operating activities was RMB 3.6624 billion, a decrease of RMB 1.4361 billion from RMB 5.0985 billion in the previous year, primarily due to operating losses[87]. - The company's total revenue for the year ended December 31, 2014, was RMB 102.18 billion, a decrease of 11.56% compared to RMB 115.54 billion in 2013[97]. Dividends and Shareholder Policies - The board of directors proposed not to distribute dividends for the year 2014 and not to increase capital from reserves[4]. - The company emphasizes a cash dividend policy, aiming to distribute at least 30% of the average distributable profit over the last three years if conditions are met[143]. - The company has not proposed a cash dividend distribution for the year 2014 despite having positive undistributed profits[146]. - The company has a stable profit distribution policy that considers the long-term interests of all shareholders[143]. Assets and Liabilities - The total assets at the end of 2014 were CNY 31,145,983 thousand, down 15.63% from CNY 36,915,933 thousand at the end of 2013[23]. - The total liabilities at the end of 2014 were CNY 14,134,000 thousand, down from CNY 18,645,300 thousand in 2013[26]. - The company’s net assets attributable to shareholders at the end of 2014 were CNY 16,500,272 thousand, a decrease from CNY 17,732,494 thousand in 2013[28]. - The debt-to-asset ratio as of December 31, 2014, was 45.73%, down from 50.89% in 2013[89]. Operational Performance - The total product output was 13.5706 million tons, a reduction of 13.03% year-on-year, with crude oil processing down by 9.56% to 14.1702 million tons[36][41]. - The average unit cost of crude oil processing was RMB 4,618.68 per ton, a decrease of 4.16% from RMB 4,819.11 per ton in 2013[41]. - The company achieved a 100% product sales rate and a 100% receivables collection rate, maintaining high product quality[37]. - The company completed investments of RMB 1.089 billion in major projects, including a diesel hydrogenation upgrade and a new EVA production line[45]. - The company produced 30.64 million tons of new products, with a differentiation rate of 64.51% for chemical fibers[45]. Market Conditions and Challenges - The company reported a significant loss due to a decline in oil prices and weak market demand, resulting in a loss of RMB 0.73 billion from investments[51]. - The global oil market is expected to remain under pressure with low prices due to oversupply and weak demand, impacting the company's operations[127]. - The company faces increased competition in the domestic petrochemical market, with slowing demand and excess refining capacity[127]. - The company faces risks from the cyclical nature of the oil and petrochemical markets, which can significantly impact revenue and pricing[134]. Environmental and Regulatory Compliance - The company is committed to environmental management, having obtained ISO 14001 certification and maintaining its status as a "China Environmental Friendly Enterprise"[148]. - In 2015, the company plans to maintain a 100% disposal rate for "three wastes" (waste water, waste gas, and waste residue) while enhancing safety and environmental management[129]. - The company is subject to stringent environmental regulations, which may lead to additional compliance costs in the future[138]. Related Party Transactions - The company has engaged in related party transactions with its controlling shareholder, Sinopec Limited, which may pose risks to its business and economic benefits[140]. - Related party transactions with Sinopec Group and its affiliates included raw material purchases totaling RMB 39.27 billion, accounting for 57.48% of the maximum limit set at RMB 85.25 billion[163]. - The company’s independent non-executive directors confirmed the ongoing related party transactions were conducted under normal commercial terms[171]. Stock Option Incentive Plan - The company has implemented a stock option incentive plan, which has been approved by relevant authorities and is aimed at aligning the interests of management and shareholders[152]. - A total of 41.03 million stock options will be granted, representing approximately 0.38% of the company's total share capital of 1,080 million shares[156]. - The stock option plan is valid until December 22, 2024[160]. Research and Development - Research and development expenses for the years 2012, 2013, and 2014 were RMB 72.2 million, RMB 67.3 million, and RMB 43.6 million respectively, indicating a decrease in R&D spending primarily due to reduced market research and travel costs[90]. - The company does not rely on any significant patents, licenses, or contracts for its operations[90]. - The company is committed to advancing research and development in key projects such as carbon fiber and needle coke, while exploring technology service export models[132].