2014 Interim Results Highlights:

Sales volume decreased 9.74% year-on-year to 8.25 million tons.

Turnover declined 22.83% year-on-year to RMB15.881 billion.

Profit attributable to shareholders of the Company was RMB138 million.

The total assets size was increased, turnover inventory was sped up compared to the same period in 2013 and the debt to assets structure was steady; the operating cash flow turned out to be net cash inflow. At the same time, the Group’s operating capacity was consolidated and enhanced and the strategic partnership with domestic and international suppliers further stepped up.

(21 August 2014, Hong Kong) Sinofert Holdings Limited ("Sinofert" or the "Company") (stock code: 00297) today announced the interim results of the Company and its subsidiaries (the "Group") for the six months ended 30 June 2014 (the “Period”).

In the first half of 2014, the fertilizer selling price was running low with a continuous downturn on the fertilizer market and the oversupply was still severe with newly-added production capacity continuously released. In order to speed up the elimination of excessive production capacity, the Chinese government constantly tightened favorable policies for the fertilizer industry, and with strengthened constraints from safety and environmental protection requirements, enterprises were faced with bigger operation pressure.

During the Period, the Group scaled down certain trading business to control risks. Total sales volume of the Group amounted to 8.25 million tons, down by 9.74% compared to the corresponding period in 2013. In addition, the average selling price of the Group decreased by 14.48% compared to the corresponding period of 2013. As a result, sales revenue was RMB15.881 billion, down by 22.83% compared to the corresponding period in 2013; gross profit was RMB 738 million, down by 34.22% compared to the corresponding period in 2013; profit attributable to shareholders of the Company amounted to RMB138 million, decreased by 60.80% compared to the corresponding period in 2013 with basic earnings per share of RMB 0.0196.

During the Period, even though the market remained sluggish and the industry was in its bottom, the Group actively took various kinds of measures on the premise of strictly controlling the market risks to promote business transformation and innovation, which resulted in strengthened market leadership and gaining profits instead of suffering losses.

Various operation quality indicators in good condition

In the first half of 2014, as the domestic and global economic situation is still severe, the oversupply was further intensified due to newly-added production capacity and the selling price of fertilizer remained low because of the even fiercer competition in the fertilizer industry. In order to speed up the elimination of excessive production capacity, the Chinese government constantly tightened favorable policies for the fertilizer industry, and with strengthened constraints from safety and environmental protection requirements, enterprises were faced with bigger operation pressure. However, under the leadership of the Board, the Group strived to innovate while maintaining steady operation. The total assets size of the Group was increased, turnover inventory was sped up compared to the same period in 2013 and the debt to assets structure was steady; the operating cash flow turned out to be net cash inflow. At the same time, the Group’s operating capacity was consolidated and enhanced and the strategic partnership with domestic and international suppliers further stepped up. Aimed at enhancing its core competitiveness, the Group also brought forth new ideas in operation and deepened transformation, focused on the implementation of seven strategies, realized sustainable development and ensured the leading position of the Group in the industry.

Regarding turnover by products in the first half of 2014, the Group achieved turnover of RMB3.401 billion from the sale of potash fertilizer, representing a decrease of 21.37% year-on-year. Turnover of nitrogen fertilizer and compound fertilizer was RMB4.607 billion and RMB3.111 billion, respectively, down 38.29% and 5.50% from a year ago. Turnover of phosphate fertilizer reduced 20.88% year-on-year to RMB3.761 billion. Meanwhile, turnover of feed-grade phosphate grew 0.62% year-on-year to RMB317 million.

As to potash fertilizer business, the Group focused on channel marketing of agricultural potash (potash for direct application) as well as innovation in marketing channels of agricultural potash, and realized steady growth in the sales of agricultural potash; continued to consolidate strategic cooperation with international core suppliers, and signed long-term contracts with suppliers to acquire stable and high-quality products. As for nitrogen fertilizer operation, the Group retained its leading market share in domestic market while controlling trading risks and forged closer partnership with key suppliers by entering into annual strategic cooperation agreements with them, to enhance the profit contribution of nitrogen. For phosphate operation, the Group strengthened the building of the core supplier system, stepped up cooperation with upstream suppliers, and ensured the low-cost and high-quality product supply. As to compound fertilizer business, the Group deeply promoted the integration and marketing transformation of compound fertilizers, continued to promote the building of marketing capabilities, as well as constantly optimized the product structure of compound fertilizers and increased sales volume of differentiated products. For feed-grade phosphate business, Sinochem Yunlong increased the utilization rate of low-grade phosphate mines, the per capita consumption of sulphuric acid products largely reduced and adopted diversified logistics, as well as delivery channels to lower transportation costs, while strengthening domestic sales force to better serve customers.

Strengthen the professional team building and improve the marketing and promotion capabilities

During the Period, the Group continued to optimize the existing distribution network and improved the profitability of the distribution network through consolidating the customer base, optimizing the product structure and strengthening the service providing capability for customers. The number of the distribution centres was maintained at over 2,000 and the number of trading customers amounted to around 11,300 in the first half of 2014. In the meantime, the Group focused on the marketing transformation of the branches, promoted the marketing transformation of compound fertilizers and the marketing transformation of agricultural potash channels. The Group centred on compound fertilizers and agricultural potash and built a professional marketing personnel team.

In the first half of 2014, the fertilizer production capacity of the Group’s subsidiaries, associates and joint-ventures exceeded 10 million tons. At the same time, production enterprises continued to push forward advanced manufacturing and through lean management, technological renovation and science and technology innovation, both production and supply capacity were further improved.

Integrate the internal and external resources and constantly make innovations in terms of service measures

The Group will continue to focus on the development of modern agriculture and the scientific and technological demand of farmers, deepen cooperation with government, scientific institutions and colleges and universities, centred on key projects such as soil testing and fertilization, combination of agricultural machinery and agronomy, integration of water and fertilizer and integrated solution method for crops, continued to provide high-quality, professional and high-efficiency comprehensive service for Chinese farmers.

Looking ahead, Mr. Wang Hong Jun, Chief Executive Officer and Executive Director of Sinofert, said, "In the second half of 2014, the growth of the Chinese economy will face relatively big pressure and the Chinese government will continue to promote domestic demand expansion and steady growth to maintain the stable economic development in China. The 18th Central Committee of the CPC proposed to: guarantee key grain supply and ensure national grain safety; improve contracted land management rights, accelerate the construction of new agricultural management system, promote large-scale agricultural production and management modernization; develop sustainable agriculture, reduce environmental pollution and ecological damage. The No.1 Document in 2014 continued to focus on agriculture for the 11th time in a row and highlighted that “rural reform should be deepened and agricultural modernization be promoted”. The Document highlighted that a long-term mechanism for sustainable development of agriculture should be set up, the utilization of high-efficiency fertilizers, organic fertilizers and low-residue pesticides be increased; meanwhile, agricultural target price system should be introduced and market-oriented agricultural price be realized, which will help further enhance the enthusiasm of the farmers. The constant attention and input of the Chinese government to the development of agriculture lays a solid foundation for the continuous development of the fertilizer industry. With the implementation of various follow-up policies to benefit the farmers, domestic fertilizer market will further gain stable and long term growth momentum."

"The domestic fertilizer market will still suffer from excessive oversupply and the trend of recombination and integration in both production and distribution sectors will speed up. Against a severe market competition environment, as a leading enterprise in China’s fertilizer industry, the Group will implement market-orientated strategies with the support of resource and technology as well as lean management, in order to build a sustainable commercial model and operation model, strive to become a global leading provider of agricultural inputs and agrochemical services, realize sustainable development of the Group, create value for shareholders, and make greater contribution to national food security and industrial development," Mr. Wang added.

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Background of Sinofert Holdings Limited

Sinofert Holdings Limited is the largest fertilizer distributor, the largest supplier of imported fertilizers and one of the largest fertilizer manufacturers in China. Based on its distribution services, it integrates production, supply and sales to achieve synergies between different operations. The Company produces and distributes nitrogen, phosphate, potash and compound fertilizers, offering customers the widest range of fertilizer products. It owns and operates the country’s largest fertilizer distribution and sales network and a comprehensive agrichemical services system. Moreover, it forges strategic alliances with major international suppliers for exclusive distribution of their products in China. As one of China’s leading phosphate resource owners, the Company is also the largest feedstuff phosphate manufacturer in Asia. Sinofert is a flagship company of Sinochem Corporation specializing in fertilizer operations. Sinochem Corporation was established in 1950 and has been named one of the Fortune Global 500 for 24 consecutive years. Its ranking in 2014 was 107th.