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Forbes/AFX News Limited: Japan's Showa Shell 2005 net profit at record level on crude oil price surge

02.17.2006, 12:29 AM
TOKYO (AFX) – Showa Shell Sekiyu KK reported that its net profit in 2005 hit a record level, driven by the sharp spike in global oil prices that pushed up the value of the company's inventory.
The earnings of oil refiners can be strongly influenced by big changes in oil prices, because they re-evaluate their inventories quarterly.
Showa Shell, a unit of the Royal Dutch/Shell group, reported that its net profit jumped to 58.4 bln yen from 2.4 bln yen in 2004.
The oil refiner also attributed the big rise in earnings to the absence of special write-downs for impaired assets, which totalled 33.7 bln yen in 2004.
Showa Shell Sekiyu said it will pass on the strong surge in earnings to shareholders in the form of an increase in the annual dividend for 2005 to 35 yen per share from 30 yen the year earlier.
Operating profit last year grew 63 pct to 98.4 bln yen as revenue jumped 23 pct to 2.27 trln yen, though sales of fuel products fell 1.2 pct to 37.77 mln kilolitres, hit by declines in demand for heavy and light oils.
For 2006, Showa Shell forecasts a decline in net profit to 39 bln yen as it does not expect to book any re-evaluation gains on oil inventories this year. At the same time it expects its sales revenue to rise to 2.75 trln yen.
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