Sinostar PEC Q1 net profit more than doubles to 26.4m yuan

Singapore

SINOSTAR PEC Holdings on Tuesday posted a more-than-doubled net profit of 26.4 million yuan (S$5.3 million) for its first quarter ended March 31, 2016 (Q117), up from 11.5 million yuan a year ago.

Revenue grew by 43 per cent from 329.2 million yuan last year to nearly 472 million yuan, boosted by a 62.5 per cent growth in the sale of propylene from 55.8 million yuan in Q116to 90.7 million yuan in Q117.

Revenue generated from the sale of processed LPG (liquefied petroleum gas) rose by 45.5 per cent to 256.3 million yuan, while that of polypropylene increased by 44.2 per cent to 76.7 per cent yuan in Q117.

Revenue from logistics and transport related services grew a marginal 9.7 per cent from 44 million yuan in Q116 to 48.3 million yuan in Q117.

Sinostar said such income had been affected by reduced transport fees given to certain major customers due to competition, and lower delivery volume required by a customer located in the Jiangsu area.

Earnings per share came up to 4.13 fen, versus 1.79 fen in the previous year.

The group's free cash flow increased to 533.3 million yuan in Q117, up from 476.1 million yuan in Q116, mainly due to cash generated from operating activities.

No dividends were declared by the mainboard-listed petrochemical company for this period.

Sinostar said that its board is cautiously optimistic of its businesses in the upcoming quarters.

"The uptrend in oil prices into 2017 signals a possible bottoming out of prices and there are signs of recovery in the market prices of petrochemical products to the previous comparable periods."

Sinostar added that its board is currently at the "advance stage of negotiation to acquire an influential stake" in a newly-built propylene processing plant, the purpose of which is to widen its LPG downstream businesses and to enhance its revenue source and profitability.

On Tuesday, Sinostar shares closed flat at S$0.225.