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Malaysia’s Shell Refining posts highest quarterly profit

Hydrocarbon Asia: Malaysia’s Shell Refining posts highest quarterly profit

“Chairman Jon Chadwick said: “We are pleased with this back-to-back achievement, surpassing even the record profit for the first quarter this year.”

Posted 30 August 04

SHELL Refining Company Bhd announced a net profit of RM175.3mil (US$1 = RM3.8) for its second quarter ended June 30, beating an earlier record profit of RM122.5mil in the first quarter.

Chairman Jon Chadwick said: “We are pleased with this back-to-back achievement, surpassing even the record profit for the first quarter this year.

“The excellent financial results was mainly due to the continued strength of our refining margins, sustained operational performance and to a lesser extent, stockholding gains,” he said in a statement yesterday.

In view of the exceptional second quarter earnings, the board has declared an interim gross dividend of 10 sen a share payable on Oct 8. This interim dividend is double the interim dividend of 5 sen a share in 2003, he said in the statement.

Shell Refining had earlier paid a special one-off 10 sen interim gross dividend in recognition of the strong performance in the first quarter this year.

Earnings per share (EPS) in the second quarter this year amounted to 58 sen and for the six-month period, the EPS totalled 99 sen.

It helped that the group’s estimated average tax rate is low at about 10%. This is due to its sizeable reinvestment allowances.

The group’s refinery processed 10 million barrels of crude oil and feedstock, and sold 10.7 million barrels of products during the second quarter.

Chadwick said the company would continue to pursue operational excellence, structural cost reductions and proactive margin improvements, in addition to maintaining a strong health, safety and environmental performance.

The performance this year “demonstrates that Shell Refining is on track towards the goal of becoming the most admired refinery in Asia. The company’s directors, management and staff will continue to pursue all measures which enhance shareholder value.”

On the current year prospects, “the strong refining margin situation will continue to hold until the end of 2004,” Chadwick said.

Shell Refining operates a world-class oil refinery in Port Dickson, the largest in the country.

It employs state-of-the-art technology to produce a range of industrial and consumer petroleum products like petrol, diesel, liquefied petroleum gas, jet fuel and engine lubricants for the Malaysian market and propylene for export.

Some 85% of the refinery’s products are sold in the country.

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