Business

Friday May 16, 2008

Shell expects refining margins to be positive


KUALA LUMPUR: Shell Refining Co (Federation of Malaya) Bhd expects refining margins to be positive for the rest of the year although they may come under pressure in the second quarter due to high crude oil prices and prevailing market volatility.

Chairman Datuk Saw Choo Boon said any changes in oil prices would have an impact on the company’s financial results given the stock accounting practices adopted by Shell.

Datuk Saw Choo Boon

The company announced net profit of RM122.55mil for its first quarter ended March 31 compared with RM137.36mil in the previous corresponding quarter due to lower refining margins and stockholding gains.

Revenue increased 56.5% to RM3.43bil from RM2.19bil while earnings per share was 40.85 sen compared with 45.79 sen previously.

“We find the financial results to be satisfactory but we are unable to say if they could be improved or maintained for the rest of the year,” Saw said after the company AGM yesterday.

He said Shell was making sure that its refinery in Port Dickson was reliable as part of its efforts in coping with the challenges of maintaining profitability.

“Our refinery also has the capacity to process a wide range of crudes and produce a wide variety of higher margin products, which serves us well in mitigating volatile oil prices,” he said, adding that keeping operation costs as low as possible was another measure undertaken to improve results.

On the outlook on oil prices, Saw said he was unsure of the trend due to the uncertain market forces.

Meanwhile, Shell Malaysia Trading Sdn Bhd managing director Datuk Mohzani Wahab said the company had no plans to acquire other companies but would continue with its plans to open 40 petrol stations this year.

“We are spreading our investment throughout the country this year. We are looking at sites in the Klang Valley, Johor, east coast region as well as Sabah and Sarawak.

“Fuel demand is growing at least 5% per annum and we would not be able to curb this demand by reducing the number of petrol stations,” he said, commenting on the recent suggestion by the Petrol Dealers Association Malaysia for the Government to stop approving new petrol stations to reduce fuel subsidy and curb profiteering.

On whether Shell would introduce natural gas fuelling facilities at its petrol stations, Mohzani said it was being considered.


SHELL : [Stock Watch] [News]

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