Business Times (Malaysia): Shell Refining posts lower Q3 net profit: Tuesday November 29, 2005
SHELL Refining Co (Federation of Malaya) Bhd yesterday reported a 19 per cent lower net profit for its third quarter 2005 compared with the comparable period of last year but said it has adopted a generous dividend policy.
Shell Refining's profit for the quarter to September was RM149.8 million compared with RM184.8 million previously. It said higher effective tax rates were charged to the company in 2005.
The latest quarter's profit, however, was despite a planned month-long statutory shutdown for maintenance work from June.
During the quarter, the company also benefited from an after-tax stockholding gain of RM 78.7 million due to the overall increase in crude oil and product prices. Shell Refining chairman, Datuk Jon Chadwick, said in a statement that the company's financial results are again pleasing and following the continued impressive performance, the board has changed its dividend strategy.
A statement issued by Shell Refining yesterday said the company is in a cash surplus position and wants to prudently return money to its shareholders. "It is the board's intention that this cash be paid out in the form of a 20-sen-per-share special interim dividend each quarter until the surplus cash has been utilised," the company said. On the basis of current planning assumptions, these special interim dividends would be paid out over the next four to eight quarters; these special interim dividends will be in addition to the interim and final dividends. The company also announced that for the foreseeable future it targets paying a total interim plus final dividend of 50 sen per share, subject to future financial performance. For 2005, it has already paid an interim dividend of 12 sen per share.
"The board believes that this revised dividend strategy will maximise value for shareholders of Shell Refining," Chadwick said. The board yesterday declared a second special gross interim dividend of 20 sen per share for the financial year ending December 31 2005.
Shell Refining said while refining margins continued to remain healthy, the refinery processed 8.7 million barrels of crude oil and feedstock compared to 10.2 million barrels in the same quarter last year. It is expected that refining margins will ease in the current quarter and the company said any weakening in oil prices may also negatively impact its financial results, given the stock accounting practices it adopts.
Copyright © Asia Intelligence Wire
Click here to return to ShellNews.net HOME PAGE