Business Times (Malaysia): Shell earnings fall on shutdown Friday August 19, 2005

A ONE-MONTH statutory plant shutdown caused a 53 per cent drop in Shell Refining Co (Federation of Malaya) Bhd's net earnings for the second quarter ended June 30.

The firm, which is 52 per cent-controlled by Dutch oil giant Shell, recorded a net profit of RM82.4 million compared with RM175 million in the same quarter last year.

In a statement, Shell Refining said the shutdown, which occurred in June, was at the Long residue catalytic cracker unit and the complex 2 unit, comprising a crude distiller and a platformer.

Shell Refining said while its refining margins remained healthy, only 7.7 million barrels of crude oil and feedstock were processed for the quarter, compared with 10 million barrels before. However, the overall increase in crude oil and product prices gave it an after-tax stockholding gain of RM39 million.

Its revenue stood at RM2.18 billion compared with RM1.78 billion in the same quarter last year.

Chairman Datuk Jon Chadwick said the refinery is back to the normal production and the company had undertaken improvement initiatives which will benefit the plant's operability in the longer term.

"It is expected that the refining margin will continue to hold in the current quarter. However, any weakening in oil prices may negatively impact the company's financial results, given the stock accounting practices adopted by the company," he said.

He added that Shell Refining will continue to pursue operational excellence, proactive margin improvement and cost-effectiveness while maintaining a strong health, safety and environment performance.

Shell Refining has also declared a record interim dividend of 12 sen a share.

Its first-half net profit was RM277.8 million on the back of RM4.44 billion revenue.

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