By Megumi Yamanaka
May 10 (Bloomberg) — Showa Shell Sekiyu K.K., the Japanese refining unit of Royal Dutch Shell Plc, said its first quarter profit dropped 72 percent as an unexpectedly mild winter cut demand for fuels such as kerosene.
Net income fell to 5 billion yen ($41.7 million) for the three months ended March 31, compared with 17.9 billion yen a year earlier, the Tokyo-based company said in a statement to the stock exchange. Sales declined 3.6 percent to 728 billion yen.
Demand for oil products made by Showa Shell and rival Nippon Oil Corp., Japan’s biggest refiner, has fallen as temperatures in January averaged the highest since 1899 and as customers shift to cleaner-burning fuels such as natural gas on environmental concerns. Japan’s sales of gasoline and other fuels fell 5.2 percent in the year ended March, according the trade ministry.
Showa Shell said its sold 1.8 percent less oil products in the first quarter.
Shares of Showa Shell fell 10 yen, or 0.8 percent, to close at 1,285 yen in Tokyo. The stock has gained 9 percent this year, compared with a 22 percent increase for Nippon Oil.
For the full-year, the company raised its sale forecast by 2.4 percent to 2.93 trillion yen, while leaving its profit forecast unchanged at 35 billion yen estimated in February. Showa Shell attributed high crude oil prices for the revision.
Showa Shell’s forecast is based on oil prices of $60 a barrel in the April-June period and $57 a barrel for the six months to December, the company said in today’s statement. Its February forecast was based on oil of $55 a barrel.
The company increased its first-half profit estimate by 42 percent to 17 billion yen, and predicted 3.6 percent higher sales of 1.45 trillion yen, compared with the February’s estimates.
To contact the reporters on this story: Megumi Yamanaka in Tokyo at [email protected] .
Last Updated: May 10, 2007 04:26 EDT
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