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Shell profits rise by 18.7 pc to over Rs 496m

RECORDER REPORT

KARACHI: Shell Pakistan's profits rose by 18.7 percent to Rs 496.497 million in the six months ended December 31, 1999, compared with Rs 418.235 million of the same period of corresponding year.

According to an information received by the Karachi Stock Exchange (KSE), Shell's profit was up mainly because of increase in petroleum prices. Due to better marketing, the company's sale also showed remarkable increase of 22.17 percent to Rs 29.418 billion in the period under review compared with Rs 24.078 million of the same period a year ago.

Shell on Monday bought 2.5 million shares worth $17.5 million from National Investment Trust (NIT) at the rate of Rs 363 per share. This buyout has increased the company's share holdings from 51.60 percent to 58.70 percent which sends a positive signal of confidence in the government's commitment to deregulate the oil sector, an analyst of Taurus Securities said.

The net profit of the company in the six months ended Dec. 31 was in the line of market men. However, the interim dividend paid by the company was Rs 4.50 per share or 45 percent which was less as the traders hoped that Shell might declare the dividend at around Rs 6 per share.

The company paid Rs 78 million as charges, Rs 785 million as administrative and marketing expenses and Rs 13.24 million as financial charges. After deducting these overheads and taxes, the profit of the company for the six months ended December 31 amounted to Rs 496 million.

Muhammad Suhail of IP Securities said that in post-nuclear-test environment when most of the multinationals held up their expansion plans, Shell exceptionally adhered to its aggressive expansion plans. During 1998-99, an amount of Rs 800 million was spent on various capital investment plans when everybody was contemplating to get out of Pakistan.

He added that the profit of the company for the whole year (1999-2000) might reach the level of Rs 985 million. However, if the government increases the petroleum prices by next month following hike in the international prices which has touched the life time high mark of $28 per barrel, the profits of the company may show an improvement of another Rs 75 to Rs 125 million.