The Wall Street Journal: Royal Dutch/Shell 2Q Net Profit $4.0B: “Management… remains unable…to estimate…possible losses from the entire set of regulatory and other actions and litigation in relation to the reserves restatement.” (ShellNews.net)
DOW JONES NEWSWIRES
July 29, 2004 3:30 a.m.
Shell
Q2 and half yr to June 30
()=Loss/Debit
Figs in $m and pence (p), unless otherwise stated.
2004 2003
Q2
Net proceeds 62,549 48,058
Optg pft of
grp companies 6,124 4,011
Optg profit 7,693 4,798
Income pretax 7,550 4,571
CCS profit 3,768 3,257
Net income 4,002 2,604
EPS basic: Royal Dutch
Net inc EUR0.98 EUR0.68
Net inc $1.18 $0.77
CCS earnings EUR0.92 EUR0.84
CCS earnings $1.11 $0.96
EPS basic: Shell
Net inc 9.3p 6.8p
Net inc ADR $1.02 $0.66
CCS earnings 8.8p 8.4p
CCS earnings ADR $0.95 $0.82
EPS diluted: Rotal Dutch
Net inc EUR0.98 EUR0.68
Net inc $1.18 $0.77
EPS diluted: Shell
Net inc 9.3p 6.8p
Net inc ADR $1.01 $0.66
H2
Net proceeds 120,627 101,850
Optg pft of
grp companies 12,967 10,609
Optg profit 15,831 12,673
CCS profit 8,057 8,508
Income pretax 15,960 13,524
Net income 8,661 8,126
EPS basic: Royal Dutch
Net inc EUR2.08 EUR2.19
Net inc $2.56 $2.39
CCS earnings EUR1.94 EUR2.28
CCS earnings $2.38 $2.50
EPS basic: Shell
Net inc 20.0p 21.2p
Net inc ADR $2.19 $2.04
CCS earnings 18.6p 22.2p
CCS earnings ADR $2.03 $2.14
EPS diluted: Royal Dutch
Net inc EUR2.08 EUR2.19
Net inc $2.56 $2.39
EPS diluted: Shell
Net inc 20.0p 21.2p
Net inc ADR $2.19 $2.04
Interim dividend:
Royal Dutch EUR0.75
Shell
6.25p
CCS is current cost of supplies
Edited Press Release
LONDON -- Royal Dutch/Shell said Thursday that net income for the second quarter to June 30, 2004 rose 54% to $4,002 million and earnings on a current cost of supply (CCS) basis rose 16% to $3,768 million.
Production for 2004 is expected to be 3.7 to 3.8 million boe per day subject to price effects on production entitlements. Production in 2005 and 2006 is likely to remain in the range of 3.5 to 3.8 million boe per day, again subject to price effects, the company said.
The latest outlook for the proven reserves replacement ratio (RRR) for 2004 is some 60% to 80%.
The earnings reflect the increased tax burden for changes in the tax regime in Denmark as applicable from the start of 2004. At current prices and relative to the same period a year ago, the overall impact of the changes in Denmark is some $200 million negative for the quarter.
Shell said the results also include a provision of $120 million in respect of certain costs anticipated to arise from the reserves restatement and consequent regulatory and legal action. Management of the Group remains unable at this stage to estimate the range of possible losses from the entire set of regulatory and other actions and litigation in relation to the reserves restatement.
CCS earnings reflected lower hydrocarbon production and higher hydrocarbon prices, strong LNG volumes offset by lower marketing and trading income in Gas & Power, record CCS earnings in Oil Products and higher Chemicals earnings.
Exploration and Production segment earnings of $1,935 million were 3% lower than a year ago. Earnings included a $141 million charge related to the mark-to-market valuation of certain long-term U.K. gas supply contracts.
Higher oil prices (+35%) and gas prices (+5%) were offset by write downs ($330 million after tax) of various exploration assets acquired with Enterprise Oil plc in 2002 and lower hydrocarbon production.
Gas & Power segment earnings were $338 million compared to $452 million a year ago, which included $140 million credits mainly from asset divestments gains. Earnings reflected strong LNG performance and gains from asset divestments ($18 million) offset by significantly lower Marketing and trading performance in North America.
Oil Products CCS segment earnings were $1,555 million compared to $975 million a year ago. Higher refining intake and increased global refining margins driven primarily by strength in gasoline demand and industry turnaround activities contributed largely to the 59% growth in CCS earnings.
Chemicals segment earnings were a profit of $371 million compared to a profit of $61 million in the same quarter last year. Earnings this quarter benefited from strong demand and high asset utilisation rates, which resulted in improved margins, the company said.
Capital investment for the quarter was $3.0 billion, excluding the minority share in Sakhalin amounting to $0.4bn, versus $3.2 billion a year ago.
The full-year capital investment is still expected to be some $14.5 billion to $15.0 billion, excluding the minority share of Sakhalin.
At the end of the quarter the debt ratio was 17.0%; cash and cash equivalents amounted to $2.4 billion.
Cash flow from operating activities for the quarter was $4.8 billion. This cash, together with divestment proceeds ($0.3 billion), funded capital expenditure ($2.9 billion), a decrease in debt of $0.5 billion and dividend payments to Parent Companies and minority interests of $4.7 billion.
Cash and cash equivalents fell by $3.3 billion.