Shell declares 255 percent dividend: net profit up by 18 percent

KARACHI (August 20 2003) : The net profit of Shell Pakistan Ltd, nation's largest non-state oil supplier, rose by 18 percent while it paid a dividend of 255 percent in the year up to June 30 2003, on higher sales and higher oil prices.

The profit amounted to Rs 1.254 billion, or Rs 35.79 a share, up from Rs 1.063 billion, or Rs 30.31 a share a year earlier, the company said in a statement to the stock exchange.

Its sales rose by 13 percent, to Rs 88.9 billion.

“Shell's profit rose because of increase in international oil prices in the first three quarters of 2003,” said Abdullah Amin, an analyst with AKD Securities.

The company plans to pay a dividend of Rs 25.50 a share for the second half, bringing the full year pay-out to Rs 35.

Previous year's dividend was Rs 18 a share.

Shell's share price in the year to June 30 rose by 92 percent, to Rs 422.25.

Revenues improved after the government raised the amount the company can charge above costs to 3.5 percent from 3 percent starting July 1, 2002, Amin said.

Farooq Rahmatullah, Managing Director of Shell Pakistan and Country Chairman for the Shell Companies, said that the growth in profits was mainly result from the increase in distributor's margins coupled with the shift in sales mix to higher margin products, but stock losses in the quarter to June caused the full year to be lower than the nine-month figure already disclosed.

The company continues its investment in upgrading and improving infrastructure (with 637 Retail Visual Identity compliant sites) and maintains its leadership in bringing international standards through the supply chain to forecourt.

This has forced competitors to emulate such offerings which in turn benefited the consumers at large in the form of improved facilities and standards.

During the year, the company disbursed the final tranche of its investment in the White Oil Pipeline Project amounting to Rs 1.2 billion, thereby raising cumulative investment of the company in the project to Rs 1.9 billion.

Additionally, capital expenditure amounted to Rs 814 million compared to Rs 703 million of last year.

Shell has a market share of 30 percent of white oil products. During the fiscal year, the company captured a further 4 percent share in the lubricants market raising it to 44 percent.

“Although we did feel the effects of a shrinking fuels market this year, Shell's fuel sales declined by 6.3 percent, compared to an industry average of 6.8 percent. Shell's average throughput per petrol station is 2.2 million litres as compared to an industry average of 1.6.”

Following are the company's full year financial figures in rupees in millions.

=======================================================                         2002-03     2001-02   Change (%)                        July-June   July-June  =======================================================  Net Sales                88,959      79,280          13  Sales Tax                11,625      10,238          14  Cost of products sold    72,049      64,164          12  Administrative Exp.       3,794       3,292          15  Financial charges            51          47           9  Profit after tax          1,254       1,063          18  =======================================================

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