中海石油化学(03983) - 2025 - 中期业绩

Financial Summary This section presents the company's key financial performance indicators for the reporting period Key Financial Indicators For the six months ended June 30, 2025, the company reported revenue of RMB 5,850 million, net profit of RMB 641 million, and basic earnings per share of RMB 0.14 Key Financial Indicators for H1 2025 | Indicator | Amount (RMB million) | | :--- | :--- | | Revenue | 5,850 | | Gross Profit | 848 | | Net Profit Attributable to Owners of the Company | 641 | | Basic Earnings Per Share | RMB 0.14 | Unaudited Interim Condensed Consolidated Financial Statements This section details the company's unaudited interim consolidated financial statements, including income, balance sheet, and notes Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the company's revenue was RMB 5,850 million, a 2.6% decrease year-on-year; net profit was RMB 723.8 million, down 2.6% year-on-year, with net profit attributable to owners at RMB 640.6 million, down 6.7% year-on-year Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Sales Revenue | 5,850,248 | 6,006,640 | -2.6% | | Cost of Sales | (5,002,371) | (5,003,497) | -0.02% | | Gross Profit | 847,877 | 1,003,143 | -15.5% | | Net Profit for the Period | 723,765 | 743,374 | -2.6% | | Profit for the Period Attributable to Owners of the Company | 640,561 | 686,827 | -6.7% | | Basic and Diluted Earnings Per Share (RMB) | 0.14 | 0.15 | -6.7% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the company's total assets were RMB 24,570.8 million, a 2.1% increase from the end of 2024, with net current assets at RMB 13,052.4 million and total equity at RMB 19,571.7 million Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 24,570,791 | 24,075,995 | +2.1% | | Non-current Assets | 8,313,949 | 8,719,566 | -4.7% | | Current Assets | 16,256,842 | 15,356,429 | +5.9% | | Total Equity | 19,571,727 | 19,506,961 | +0.3% | | Total Liabilities | 4,999,064 | 4,569,034 | +9.4% | | Net Current Assets | 13,052,435 | 12,843,481 | +1.6% | Notes to the Condensed Consolidated Financial Statements This section details the company's basic information, accounting policies, operating segment performance, revenue composition, expenses, taxation, share capital, and related party transactions Company Information and Basis of Preparation The company primarily engages in the production and sale of urea, methanol, phosphate fertilizers, compound fertilizers, and acrylonitrile, with its direct and ultimate holding company being China National Offshore Oil Corporation, and these interim financial statements are prepared in accordance with IAS 34 - The Group is principally engaged in the production and sale of urea, methanol, phosphate fertilizers (MAP, DAP), compound fertilizers, and acrylonitrile (AN)[14] - These condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' issued by the International Accounting Standards Board[14] Principal Accounting Policies These condensed consolidated financial statements adopt the same accounting policies as the previous year, incorporating new or revised International Financial Reporting Standards issued by the IASB, with no significant impact on accounting policies - These condensed consolidated financial statements are prepared on the historical cost basis, except for certain financial instruments measured at fair value[15] - The adoption of new or revised International Financial Reporting Standards (such as amendments to IAS 21) has no significant impact on the Group's accounting policies[15][16] Operating Segment Information The company is divided into five operating segments: urea, phosphate and compound fertilizers, methanol, acrylonitrile, and others; in H1 2025, methanol contributed the most to profit before tax, while urea had the highest revenue but decreased year-on-year - The company's operating segments include urea, phosphate and compound fertilizers, methanol, acrylonitrile, and other segments[17][19] Segment Revenue and Profit Before Tax (For the six months ended June 30) | Segment | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | Revenue Y-o-Y Change (%) | 2025 Profit Before Tax (RMB thousand) | 2024 Profit Before Tax (RMB thousand) | Profit Before Tax Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Urea | 1,660,765 | 2,102,435 | -21.0% | 122,469 | 372,632 | -67.1% | | Phosphate and Compound Fertilizers | 1,343,230 | 1,371,290 | -2.0% | 21,726 | 82,966 | -73.8% | | Methanol | 1,592,768 | 1,478,553 | +7.7% | 465,098 | 314,302 | +48.0% | | Acrylonitrile | 1,074,748 | 824,910 | +30.3% | 15,110 | 12,193 | +23.9% | | Others | 178,737 | 229,452 | -22.1% | (68,247) | (67,889) | +0.5% | | Total | 5,850,248 | 6,006,640 | -2.6% | 556,156 | 714,204 | -22.1% | - Management decided to disclose BB fertilizer as a new segment and re-presented comparative data for the phosphate and compound fertilizers segment and other segments[24] Sales Revenue and Other Income Sales revenue for H1 2025 was RMB 5,850.2 million, a 2.6% year-on-year decrease, while other income decreased by 22.7% to RMB 25.2 million, primarily due to reduced income from labor services and material sales Sales Revenue and Other Income Analysis (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Sales Revenue | 5,850,248 | 6,006,640 | -2.6% | | Other Income | 25,160 | 32,550 | -22.7% | - The decrease in other income was primarily due to a reduction of RMB 2.2 million in labor service income and RMB 3.6 million in material sales income[62] Other Gains and Losses Other gains and losses significantly increased to RMB 83.7 million in H1 2025, a 4,085.0% year-on-year growth, primarily driven by gains from the disposal of assets due to shantytown renovation and expropriation by Basuo Port Company Other Gains and Losses (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Gain on Disposal of Property, Plant and Equipment | 5,463 | 2,019 | +170.6% | | Gain on Disposal of Prepaid Lease Payments | 78,253 | – | N/A | | Total | 83,716 | 2,019 | +4085.0% | - The significant increase in other gains and losses was primarily due to an increase of RMB 77.9 million from the disposal of assets due to shantytown renovation and expropriation by Basuo Port Company[63] Profit Before Tax Profit before tax for the period has been deducted for cost of sales, depreciation, and amortization, with cost of sales remaining largely flat year-on-year and total depreciation and amortization decreasing Items Deducted/Included in Profit Before Tax (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Cost of Sales Recognized as Expense | 5,002,371 | 5,003,497 | -0.02% | | Total Depreciation and Amortization | 331,198 | 362,856 | -8.6% | | Reversal of Impairment Loss on Trade Receivables | (17) | (177) | -90.4% | Income Tax Expense Income tax expense for H1 2025 was RMB 115.3 million, a 25.8% year-on-year decrease, primarily due to lower profit before tax, partially offset by increased tax expenses from asset disposal gains related to shantytown renovation Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Current Income Tax | 117,541 | 155,893 | -24.6% | | Deferred Tax | (2,231) | (548) | +307.1% | | Total | 115,310 | 155,345 | -25.8% | - Chinese subsidiaries are subject to a 25% tax rate, while certain subsidiaries in encouraged industries within the Hainan Free Trade Port enjoy a reduced corporate income tax rate of 15%[30] - The decrease in income tax expense was primarily due to a RMB 49.5 million year-on-year reduction in operating profit before tax, partially offset by an RMB 11.7 million increase in current income tax expense from asset disposal gains related to shantytown renovation by Basuo Port Company[72] Earnings Per Share Attributable to Owners of the Company For the six months ended June 30, 2025, basic and diluted earnings per share attributable to owners of the company decreased to RMB 0.14 from RMB 0.15 in the prior period Earnings Per Share (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Net Profit for the Period Attributable to Owners of the Company (RMB thousand) | 640,561 | 686,827 | | Number of Ordinary Shares Issued (thousand shares) | 4,610,000 | 4,610,000 | | Basic and Diluted Earnings Per Share (RMB) | 0.14 | 0.15 | - The Group had no potential dilutive shares during the reporting period, thus diluted earnings per share were the same as basic earnings per share[33] Prepaid Lease Payments In H1 2025, the Group did not acquire new land use rights and disposed of prepaid lease payments with a carrying value of RMB 1,847,000 - The Group did not acquire any new land use rights in H1 2025[32] - The Group disposed of prepaid lease payments with a carrying value of RMB 1,847,000[32] Interests in Joint Ventures As of June 30, 2025, the Group's interests in joint ventures increased to RMB 396.9 million from the end of 2024, primarily including Guizhou Jinlin Chemical and CNOOC Chemical (Canada) Holdings Interests in Joint Ventures | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Interests in Joint Ventures | 396,863 | 333,906 | - Key joint ventures include Guizhou Jinlin Chemical Co., Ltd. (33.99% stake) and CNOOC Chemical (Canada) Holdings Co., Ltd. (60.00% stake)[34] - The company has joint control over CNOOC Chemical (Canada), thus it is classified as a joint venture[34] Interests in Associates As of June 30, 2025, the Group's interests in associates amounted to RMB 129.5 million, including Guangxi Huiduoli Agricultural Technology and PetroChina (Inner Mongolia) New Materials Interests in Associates | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Interests in Associates | 129,546 | 127,404 | - Key associates include Guangxi Huiduoli Agricultural Technology Co., Ltd. (34.00% stake), PetroChina (Inner Mongolia) New Materials Co., Ltd. (25.27% stake), and United Huinong Agricultural Materials (Beijing) Co., Ltd. (30.00% stake)[35] Loans Receivable As of June 30, 2025, total loans receivable were RMB 208.3 million, all current and due within one year, a reclassification from non-current at the end of 2024 Loans Receivable (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Unsecured Loans - Principal | 208,252 | 208,252 | | Due within one year | 208,252 | – | | Due after one year but within two years | – | 208,252 | | Current portion | 208,252 | – | | Non-current portion | – | 208,252 | - Loans receivable are unsecured, bear interest at the five-year Loan Prime Rate minus 1.75%, and are repayable on May 8, 2026[37] Trade Receivables As of June 30, 2025, trade receivables significantly increased to RMB 109.8 million from the end of 2024, with amounts due from certain CNOOC Group companies accounting for the largest portion Aging Analysis of Trade Receivables (As of June 30) | Aging | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Within one year | 106,950 | 20,777 | | Over three years | 2,884 | 2,310 | | Total | 109,834 | 23,621 | Trade Receivables from Related Parties (As of June 30) | Related Party | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Certain CNOOC Group Companies | 78,212 | 9,065 | | Associates | 2,844 | 2,844 | | Joint Ventures | 1,111 | 1,714 | | Total | 82,167 | 13,623 | - The Group's sales of products such as urea, methanol, acrylonitrile, monoammonium phosphate, and diammonium phosphate are primarily settled through advance payments, while export sales accept irrevocable letters of credit[39] Bills Receivable As of June 30, 2025, all of the Group's bills receivable were due within twelve months, with no endorsement of bills receivable to settle trade payables during the period, a significant decrease compared to the prior period - All of the Group's bills receivable as of June 30, 2025, and December 31, 2024, were due within twelve months[41] - For the six months ended June 30, 2025, the Group did not endorse any bills receivable due within twelve months to settle trade payables (December 31, 2024: RMB 101,547,000)[41] Proposed Dividends The Board does not recommend an interim dividend for H1 2025; the company distributed 2024 annual dividends totaling RMB 556.9 million in H1 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[43] - The company distributed a 2024 annual dividend of RMB 0.1208 per share in H1 2025, totaling RMB 556,888,000[43] - A 10% corporate income tax is withheld when dividends are paid to non-Chinese resident enterprise shareholders[43] Trade Payables As of June 30, 2025, trade payables were RMB 1,023.0 million, a slight decrease from the end of 2024, with amounts due to certain CNOOC Group companies accounting for the largest portion Aging Analysis of Trade Payables (As of June 30) | Aging | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Within one year | 1,020,751 | 1,022,590 | | Over one year but within two years | 751 | 42,349 | | Total | 1,022,988 | 1,067,996 | Trade Payables to Related Parties (As of June 30) | Related Party | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Certain CNOOC Group Companies | 433,344 | 364,373 | | Joint Ventures | 3,338 | 71 | | Other Related Parties | 1,214 | 6,346 | | Total | 437,896 | 370,790 | - Trade payables are unsecured, non-interest bearing, and generally have repayment terms ranging from 30 to 180 days[44] Management Discussion and Analysis This section provides an overview of the company's operational and financial performance, industry trends, and future outlook Industry Review In H1 2025, the fertilizer market experienced significant price fluctuations, with urea prices falling 19% year-on-year, while phosphate fertilizer prices remained high and increased; the chemical industry faced overall pressure, with methanol prices fluctuating and acrylonitrile prices declining by 5.4% year-on-year due to oversupply Fertilizer Industry The urea market experienced significant fluctuations due to supply, demand, and policy, with average prices falling 19% year-on-year in H1; phosphate fertilizer prices remained generally high, with monoammonium phosphate up 6.48% and diammonium phosphate up 1.59% year-on-year - The average price of urea in H1 was RMB 1,804/ton, a year-on-year decrease of RMB 434/ton, representing a 19% decline[46] - The average price of monoammonium phosphate was RMB 3,268/ton, a year-on-year increase of 6.48%[47] - The average price of diammonium phosphate was RMB 3,954/ton, a year-on-year increase of 1.59%[48] Chemical Industry The chemical industry faced overall pressure from international oil prices and trade policies; methanol prices fluctuated, while acrylonitrile prices declined by 5.4% year-on-year in H1 due to oversupply - In H1 2025, domestic chemical industry prices remained under pressure due to a downward shift in international oil prices and increased disruptions from tariffs and other trade policies[49] - The average price of acrylonitrile in H1 was RMB 9,350.41/ton, a 5.4% decrease from RMB 9,888.10/ton in the prior period[51] - The core reason for the decline in acrylonitrile's average price is that the increase in industry consumption lagged behind the increase in supply, exacerbating the oversupply situation[52] Business Review In H1, the company strengthened production and operation management, achieving record high methanol output and port throughput, successfully produced the first domestic green methanol, and maintained 100% compliance in pollutant emissions for three consecutive years Operating Results In H1, the company produced 968,000 tons of urea, 781,000 tons of methanol, 450,000 tons of phosphate and compound fertilizers, and 132,000 tons of acrylonitrile series products, while selling 996,000 tons of urea, 726,000 tons of methanol, 386,000 tons of phosphate and compound fertilizers, and 127,000 tons of acrylonitrile series products - Hainan Fudao's methanol output and Basuo Port's cumulative throughput both reached record highs for the same period[53] - The company successfully produced the first ton of green methanol in China using municipal waste as raw material, obtained International Sustainability and Carbon Certification (ISCC), and successfully applied it to domestic dual-fuel vessels[53] Green Development and Environmental Protection In H1, the company integrated monitoring data into its environmental information system, achieved 100% compliance in pollutant emissions for three consecutive years with zero environmental pollution incidents, and increased the comprehensive utilization rate of phosphogypsum at Dayukou Chemical to 73.09% - The company achieved unified access of monitoring data to the environmental information system, with 100% compliance in pollutant emissions for three consecutive years and zero environmental pollution incidents[54] - Dayukou Chemical's comprehensive utilization rate of phosphogypsum increased from 61.15% to 73.09%, exceeding target requirements[54] Production and Sales Volume of Major Products In H1 2025, production and sales volumes of urea, methanol, and acrylonitrile series products all increased year-on-year, with acrylonitrile series products showing significant growth, while phosphate and compound fertilizers saw slight increases Production and Sales Volume of Major Products (For the six months ended June 30) | Product | 2025 Production Volume (tons) | 2025 Sales Volume (tons) | 2024 Production Volume (tons) | 2024 Sales Volume (tons) | Production Y-o-Y Change (%) | Sales Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Urea | 967,647 | 995,833 | 973,476 | 1,003,262 | -0.6% | -0.7% | | Phosphate and Compound Fertilizers | 449,628 | 385,801 | 445,081 | 401,005 | +1.0% | -3.8% | | Methanol | 781,466 | 726,174 | 706,984 | 668,460 | +10.5% | +8.6% | | Acrylonitrile Series | 132,178 | 127,344 | 97,491 | 88,418 | +35.6% | +44.0% | | BB Fertilizer | 13,396 | 11,155 | N/A | N/A | N/A | N/A | Financial Review In H1 2025, the company's total revenue and net profit both decreased year-on-year, with reduced revenue from urea and phosphate/compound fertilizers offset by increases from methanol and acrylonitrile series products, leading to a 15.5% decline in gross profit, while other gains and losses significantly increased due to asset disposal gains, and the company maintained sound financial resources with ample cash and cash equivalents Revenue and Gross Profit The Group's revenue decreased by 2.6% year-on-year to RMB 5,850.2 million, primarily due to a significant drop in urea sales prices, and gross profit decreased by 15.5% to RMB 847.9 million, mainly due to reduced gross profit from urea and phosphate/compound fertilizers, partially offset by increased methanol gross profit Revenue Change by Product (For the six months ended June 30) | Product | 2025 Revenue (RMB million) | 2024 Revenue (RMB million) | Y-o-Y Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Urea | 1,660.8 | 2,102.4 | -21.0% | Decrease in sales price (RMB 426.1 million) and lower sales volume (RMB 15.5 million) | | Phosphate and Compound Fertilizers | 1,343.2 | 1,371.3 | -2.0% | Decrease in sales volume (RMB 9.6 million) and lower sales price (RMB 18.5 million) | | Methanol | 1,592.8 | 1,478.6 | +7.7% | Increase in sales volume (RMB 127.6 million) offset by decrease in sales price (RMB 13.4 million) | | Acrylonitrile Series Products | 1,074.7 | 824.9 | +30.3% | Increase in sales volume (RMB 363.1 million) offset by decrease in sales price (RMB 113.3 million) | | Other Businesses | 178.7 | 229.5 | -22.1% | Decrease in trading volume (RMB 51.0 million) | | Total | 5,850.2 | 6,006.6 | -2.6% | | - Gross profit decreased by 15.5%, primarily due to a RMB 263.5 million reduction in urea gross profit, a RMB 73.1 million reduction in phosphate and compound fertilizer gross profit, and a RMB 3.3 million reduction in acrylonitrile series products gross profit, partially offset by a RMB 149.3 million increase in methanol gross profit and a RMB 35.4 million increase in other business gross profit[61] Other Income and Other Gains and Losses Other income decreased by 22.7% year-on-year to RMB 25.2 million, mainly due to reduced income from labor services and material sales, while other gains and losses surged by 4,085.0% to RMB 83.7 million, primarily driven by asset disposal gains from shantytown renovation by Basuo Port Company Changes in Other Income and Other Gains and Losses (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 25.2 | 32.6 | -22.7% | | Other Gains and Losses | 83.7 | 2.0 | +4085.0% | - The significant increase in other gains and losses was primarily due to a year-on-year increase of RMB 77.9 million from the disposal of assets due to shantytown renovation and expropriation by Basuo Port Company[63] Selling and Distribution Costs Selling and distribution costs decreased by 16.3% year-on-year to RMB 33.5 million, primarily due to reduced personnel costs and promotional expenses for sales organizations Changes in Selling and Distribution Costs (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Costs | 33.5 | 40.0 | -16.3% | - The decrease in selling and distribution costs was primarily due to a year-on-year reduction of RMB 3.4 million in personnel costs for sales organizations and RMB 1.1 million in promotional expenses[64] Administrative Expenses Administrative expenses were RMB 283.4 million, a slight year-on-year increase of 0.7%, remaining largely stable Changes in Administrative Expenses (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 283.4 | 281.5 | +0.7% | Other Expenses Other expenses significantly increased by 938.5% to RMB 27.0 million, primarily due to a year-on-year increase in external donations Changes in Other Expenses (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Other Expenses | 27.0 | 2.6 | +938.5% | - The increase in other expenses was primarily due to a year-on-year increase of RMB 25.0 million in external donations during the current year[66] Finance Income and Finance Costs Finance income decreased by 5.6% year-on-year to RMB 162.9 million, mainly from large-denomination deposit certificates, while finance costs decreased by 9.6% to RMB 24.4 million, primarily due to lower loan interest rates Changes in Finance Income and Finance Costs (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Finance Income | 162.9 | 172.6 | -5.6% | | Finance Costs | 24.4 | 27.0 | -9.6% | - Finance income from large-denomination deposit certificates amounted to RMB 156.6 million[67] - The decrease in finance costs was primarily due to a year-on-year reduction in loan interest rates[67] Net Exchange Differences The Group recorded a net exchange gain of RMB 0.8 million, a significant improvement from a net loss of RMB 5.9 million in the prior period, mainly due to exchange rate fluctuations between the declaration and payment of H-share dividends Changes in Net Exchange Differences (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Net Exchange Differences | +0.8 (Gain) | -5.9 (Loss) | Increase in gain of RMB 6.7 million | - The net exchange gain was primarily due to significant exchange rate fluctuations between the declaration and payment of H-share dividends in the prior year[69] Share of Net Profit or Loss of Associates and Joint Ventures Share of profit from associates and joint ventures significantly increased by 1,384.1% to RMB 65.3 million, primarily due to a substantial improvement in the operating performance of Guizhou Jinlin Chemical Co., Ltd Changes in Share of Net Profit or Loss of Associates and Joint Ventures (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Share of Profit from Associates and Joint Ventures | 65.3 | 4.4 | +1384.1% | - The increase in profit was primarily due to a significant year-on-year improvement in the operating performance of Guizhou Jinlin Chemical Co., Ltd., with an additional RMB 58.5 million in investment income recognized from it this year[71] Income Tax Expense Income tax expense for H1 2025 was RMB 115.3 million, a 25.8% year-on-year decrease, primarily due to lower profit before tax, partially offset by increased tax expenses from asset disposal gains related to shantytown renovation Changes in Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Income Tax Expense | 115.3 | 155.3 | -25.8% | - The decrease in income tax expense was primarily due to a year-on-year reduction in the Group's operating profit before tax, resulting in a RMB 49.5 million decrease in current income tax expense, partially offset by an RMB 11.7 million increase in current income tax expense from asset disposal gains related to shantytown renovation by Basuo Port Company[72] Net Profit for the Period The Group's net profit for the period was RMB 723.8 million, a 2.6% year-on-year decrease Changes in Net Profit for the Period (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Net Profit | 723.8 | 743.4 | -2.6% | Dividends The Board does not recommend an interim dividend for H1 2025; the company distributed 2024 annual dividends totaling RMB 556.9 million in cash during the reporting period - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[74] - During the reporting period, the company distributed 2024 dividends totaling RMB 556.9 million in cash[74] Capital Expenditure During the reporting period, the Group's capital expenditure totaled RMB 78.76 million, primarily allocated to mid-to-downstream construction projects, technological transformation projects, and energy-saving, safety, and environmental protection projects Composition of Capital Expenditure (For the six months ended June 30) | Item | Amount (RMB million) | | :--- | :--- | | Mid-to-Downstream Construction Projects | 49.76 | | Base Construction (Production Support) | 0.37 | | Technological Transformation Projects | 16.82 | | Energy-Saving, Safety, and Environmental Protection Projects | 4.07 | | Information Technology Construction, Electronic Office Equipment | 6.71 | | Research Projects (Capital Expenditure) | 1.03 | | Total | 78.76 | - Key projects include the second phase of Dayukou Company's Phosphogypsum Dry Stacking Project (RMB 27.83 million) and Dayukou Company's 1.6 million tons/year Underground Phosphate Mining Project (RMB 19.48 million)[75] Pledge of Assets As of June 30, 2025, the Group had no property, plant, and equipment pledged as collateral for interest-bearing bank borrowings - As of June 30, 2025, the Group had no property, plant, and equipment pledged as collateral for interest-bearing bank borrowings[76] Capital Management The Group's capital management aims to maintain a high credit rating and sound capital structure; as of June 30, 2025, total interest-bearing debt was RMB 2,335.2 million, with a capital gearing ratio of 10.7% - The Group's primary objective in capital management is to maintain a high credit rating and a sound capital structure to ensure normal operations and maximize shareholder value[77] - As of June 30, 2025, the Group's total interest-bearing debt was RMB 2,335.2 million, all of which were floating-rate liabilities[77] - The Group's capital gearing ratio as of June 30, 2025, was 10.7%[77] Cash and Cash Equivalents As of June 30, 2025, the Group's cash and cash equivalents decreased to RMB 533.1 million from the beginning of the year but still maintained ample liquidity Changes in Cash and Cash Equivalents (H1 2025) | Item | Amount (RMB million) | | :--- | :--- | | Cash and cash equivalents at beginning of year | 679.9 | | Net cash inflow from operating activities | 584.8 | | Net cash outflow from investing activities | (249.5) | | Net cash outflow from financing activities | (482.0) | | Decrease due to exchange rate changes | (0.1) | | Cash and cash equivalents at end of period | 533.1 | - The Group holds ample liquidity to meet its daily operational and future development funding needs[78] Human Resources and Training As of June 30, 2025, the Group had 3,675 employees, with total wages and allowances of approximately RMB 439.9 million in H1, and the company maintains a comprehensive compensation system, systematic welfare plans, and extensive safety training programs - As of June 30, 2025, the Group had 3,675 employees, and total wages and allowances for employees in H1 2025 amounted to approximately RMB 439.9 million[79] - The company has a comprehensive compensation system, systematic welfare plans, and an effective performance evaluation system[79] - As of June 30, 2025, the company conducted 41,140 person-times of training, totaling 169,305 class hours, including 34,557 person-times and 99,363 class hours for safety training[79] Market Risks The Group faces market risks including commodity price risk from product sales prices and raw material/fuel costs, interest rate risk from floating-rate debt, and foreign exchange risk from RMB/USD fluctuations, while inflation had no significant impact on operating performance Commodity Price Risk The Group is exposed to commodity price risk arising from changes in the selling prices of its major products and the costs of raw materials (natural gas, coal, phosphate rock, liquid ammonia, and sulfur) and fuels (natural gas and coal) - The Group's primary market risks are changes in the selling prices of major products, costs of raw materials (natural gas, coal, phosphate rock, liquid ammonia, and sulfur), and costs of fuels (natural gas and coal) and power[80][81] Interest Rate Risk The Group's market interest rate risk primarily stems from its short-term and long-term debt obligations bearing floating interest rates - The Group's market interest rate risk primarily arises from its short-term and long-term debt obligations bearing floating interest rates[82] Foreign Exchange Risk The Group's sales revenue and procurement are primarily denominated in RMB and USD, and fluctuations in the RMB/USD exchange rate impact imports, exports, and USD financing; as of June 30, 2025, USD deposits totaled 10.1 million USD - The Group's sales revenue and procurement are primarily denominated in RMB and USD[83] - Fluctuations in the RMB/USD exchange rate can impact the company's equipment and raw material imports, product exports, and USD financing[83] - As of June 30, 2025, the Group's USD deposit balance was 10.1 million USD, and HKD deposit balance was 2.0 million HKD[83] Inflation and Currency Risk During the reporting period, China's Consumer Price Index decreased by 0.1% year-on-year, which did not have a significant impact on the Group's operating performance - During the reporting period, China's Consumer Price Index decreased by 0.1% year-on-year, which did not have a significant impact on the Group's operating performance[84] Subsequent Events, Contingent Liabilities, and Litigation From the end of the reporting period to the announcement date, the Group had no significant subsequent events, contingent liabilities, major litigation, arbitration matters, or significant acquisitions and disposals - No significant events occurred from the end of the reporting period to the date of this announcement[85] - During the reporting period, the Group had no significant contingent liabilities[86] - During the reporting period, the Group had no major litigation or arbitration matters, nor any acquisitions or disposals of subsidiaries and associates[87][88] H2 2025 Industry Outlook In H2 2025, the urea market is expected to remain in oversupply, with prices potentially rising in Q3 but facing pressure in Q4; monoammonium phosphate prices may fluctuate narrowly at high levels, diammonium phosphate market to stabilize, methanol supply to remain loose with wide price fluctuations, and acrylonitrile oversupply to intensify, requiring mainstream enterprises to reduce plant loads for price improvement - In H2 2025, urea will remain in a capacity expansion cycle, and the market as a whole is expected to continue in an oversupply situation[89] - Monoammonium phosphate prices may show high-level, narrow fluctuations, while the diammonium phosphate market is expected to maintain a stable and consolidating trend[89] - Methanol supply will remain loose in H2, with overall price movements characterized by wide fluctuations; the oversupply of acrylonitrile will further intensify, and price improvement will depend on domestic mainstream enterprises reducing plant loads[89] Company's Key Initiatives for H2 2025 The company's key initiatives for H2 include improving equipment management, enhancing marketing and value creation, advancing 'AI+' initiatives, promoting research on carbon-rich natural gas utilization projects, strengthening brand value, and exploring green fuel industry investment opportunities - Improve the equipment management system to ensure safe and stable operation of facilities[90] - Focus on establishing quality positioning, expanding markets and sales, and enhancing marketing and value creation capabilities[90] - Advance the 'AI+' initiative to accelerate the deep integration of digital intelligence technology with the real economy[92] - Promote research on key projects for carbon-rich natural gas utilization and explore more investment opportunities in the green fuel industry[92] Supplementary Information This section provides additional details on corporate governance, compliance, and disclosure practices Audit Committee The Audit Committee reviewed the interim results and had no disagreements with external auditors, Mazars CPA Limited, on accounting treatments; the interim results are unaudited but have undergone an independent review - The Audit Committee, together with management, reviewed the accounting principles and standards adopted by the Group and discussed internal controls and financial reporting matters[90] - The interim results for the six months ended June 30, 2025, are unaudited but have undergone an independent review in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[90] - The Audit Committee and the independent auditor had no disagreements on the accounting treatments adopted for the preparation of the interim results for the reporting period[90] Compliance with Corporate Governance Code The company is committed to maintaining high standards of corporate governance; following Mr. Hou Xiaofeng's resignation as CEO and President on March 18, 2025, the company has re-complied with Code Provision C.2.1 of the Corporate Governance Code, and Mr. Hou, as Chairman, was unable to attend the 2025 AGM due to other commitments - The company is committed to maintaining high standards of corporate governance to enhance transparency and protect the overall interests of shareholders[91] - On March 18, 2025, Mr. Hou Xiaofeng resigned as the company's Chief Executive Officer and President, and the company has since re-complied with Code Provision C.2.1 of the Corporate Governance Code[93] - Mr. Hou Xiaofeng, the Chairman of the Board, was unable to attend the 2024 Annual General Meeting held on May 29, 2025, due to other commitments, and the meeting was chaired by Executive Director Ms. He Qunhui[94] Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers The Board confirms that all directors and supervisors complied with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules for the six months ended June 30, 2025 - The Board confirms that all members of the Board and supervisors complied with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules for the six months ended June 30, 2025[95] Purchase, Sale, and Redemption of the Company's Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities for the six months ended June 30, 2025 - Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities for the six months ended June 30, 2025[96] Disclosure of Information on the HKEX Website This results announcement has been published on the HKEXnews website and the company's website, and the 2025 interim report will be published in due course - This results announcement is published on the HKEXnews website (http://www.hkexnews.hk) and the company's website (http://www.chinabluechem.com.cn)[97](index=97&type=chunk) - The 2025 interim report will be published on HKEXnews and the company's website in due course[97]