2021 Annual Results Highlights:
Sales volume decreased by 14.54% year-on-year to 10.40 million tons.
Revenue increased by 5.89% year-on-year to RMB 22.641 billion.
Total sales volume of special fertilizers and differentiated products increased by 32% year-on-year to 1.39 million tons.
Profit attributable to owners of the Company recorded RMB 867 million, representing an increase of 34.63% year-on-year.
Basic earnings per share was RMB 0.1234, representing an increase of 34.57% year-on-year.
The Board of directors recommended the payment of a final dividend of HKD 0.0528 per share.
(22 March 2022, Hong Kong) Sinofert Holdings Limited ("Sinofert" or the "Company",
together with its subsidiaries collectively known as the "Group") (stock code: 297.HK) announced the annual results for the twelve months ended 31 December 2021 (the "Period").
For the year ended 31 December 2021, total sales volume of the Group amounted to 10.40 million tons, representing a decrease of 14.54% year-on-year. Revenue was RMB 22.641 billion, up by 5.89% year-on-year. Gross profit was RMB 1.96 billion, down by 1.36% year-on-year, which was mainly due to substantial decrease in gross profit from the continuous increase in the purchase price of potash fertilizer. Excluding such factor, the actual operating profit of the Group increased by 10.27% year-on-year. Profit attributable to shareholders of the Company recorded RMB 867 million, representing an increase of 34.63% year-on-year.
In 2021, with the goal of fertilizer application reduction and efficiency enhancement as well as soil health improvement, the Group focused on underlying technologies such as bioscience and efficient utilization of nutrients. Research and development system focused on “efficient nutrient + soil health + biologics”was established. At the same time, the integration mechanism of research, production and sales was fully implemented to further speed up the efficiency of transformation of research achievements. The production and sales volume of commercialized products for the whole year exceeded 1,000,000 tons for the first time, with the proportion of differentiated products such as biofertilizers and special fertilizers increasing significantly. The compound fertilizer named Lanlin-Guanwushuang, a differentiated product jointly developed with the crop protection business units of Syngenta Group China, achieved the production and sales volume of nearly 30,000 tons by leveraging its outstanding performance in field. Youcuilu, the first in-house developed and produced botanical activator was launched. The second generation of basic fertilizers for efficiency improvement, such as Meilinmei and Linbao, were upgraded jointly with the Chinese Academy of Agricultural Sciences, demonstrating a significant effect of increasing yield. The joint establishment of the “National Engineering Research and Development Center for Arable Land Protection” with the Chinese Academy of Agricultural Sciences was approved by the National Development and Reform Commission, signifying the Group’s first qualification for being a national-level research and development platform. In the future, the Group will continue to focus on improving nutrient utilization, maintaining soil health and promoting high yield and quality of crops, with a view to developing and promoting new crop nutrition products through the mechanism of integrating research, production and sales.
During the Period, total sales volume of special fertilizers and various differentiated products was 1.39 million tons, representing an increase by 32% year-on-year. Thereinto, sales volume of special fertilizers was 100,000 tons, up by 11% year-on-year. Sales volume of differentiated compound fertilizer was 900,000 tons, up by 41% year-on-year. Sales volume of differentiated nitrogen fertilizer was 260,000 tons, up by 18% year-on-year; and sales volume of new phosphate fertilizer was 130,000 tons, up by 45% year-on-year.
During the Period, the three operating segments of the Group, namely, Basic Fertilizers Segment, Distribution Segment and Production Segment were well developed. In particular, the Basic Fertilizers Segment aggressively explored new strategic suppliers, continuously focused on strategic procurement, and strengthened the relationship with its core suppliers to ensure a steady supply of high-quality products. The Group also strengthened the downstream channels and leveraged innovation and transformation. During the Period, the Basic Fertilizers Segment made a profit before taxation of RMB 600 million, up by 18% year-on-year, continuing to be the anchor for profits. The Distribution Segment continued its robust growth. Capitalizing on the synergy arising from research, production and sales and continuous adjustments of the product structure, the gross profit margin has been increasing. Profit before taxation of the Distribution Segment amounted to RMB 166 million, up by 11% year-on-year. Production Segment overcame the adverse effects of dual energy control and rising prices of raw materials such as coal and sulfur, making every effort to ensure stable, long-lasting and optimal operations. At the same time, the production enterprises seized the favorable opportunity arising from surging prices of ammonia and MCP/DCP. As a result, the gross profit margin hit a record high. The annual sales volume amounted to 650,000 tons in aggregate. Profit before taxation amounted to RMB 277 million.
As at 31 December 2021, the Group’s current ratio was 1.42, and its debt-to-equity ratio was 12.17%. The Group enjoyed relatively high banking facilities, and had smooth financing channels and a stable and sound financial structure.
Mr. J. Erik Fyrwald, Chairman of Sinofert, states, “In 2021, facing such overwhelming market challenges, the Group firmly implemented various strategic initiatives determined at the beginning of the year. By adopting various professional operational measures including innovative digital marketing model, channel coordination and differentiation, the Group managed to seize market opportunities and achieve fruitful results on various fronts. In 2022, the Group will continue to focus on business transformation and upgrading, follow the trend of the rapidly changing fertilizer industry in China, and take root in modern agriculture to promote healthy and sustainable development of arable land, thereby leading the industry in green emission reduction and innovation. The Group will also streamline its operational structure to achieve stable and sustainable growth.”