Shell switches to profit from loss
Shell Rs284 million did post a loss in the third quarter of 2011 due to lower sales volume and oil price volatility.
KARACHI:
Shell switched to a profit of Rs1.12 billion in the first nine months of 2011 compared with a loss of Rs11.5 million in the same period last year.
However, a break-up shows that the country’s second largest oil marketing company did post a loss of Rs284 million in the third quarter of 2011 due to lower sales volume and oil price volatility.
The results are much lower than market expectations as analysts expected nine month net profit to stand at Rs2 billion while quarterly the company was estimated to post a profit.
This was further impacted by soaring financing costs due to surging government receivables and tax rate of 70%, the chairman said in the result review statement.
Sales rose 20% to Rs188 billion during January to September against Rs158 billion posted last year.
Government receivables are now more than Rs14 billion and causing a huge financial surcharge, said the chairman talking about their part in the circular debt in the result review. Since the start of this debt, the second largest oil marketing company has had to pay more than Rs3.5 billion in interest costs.
Financial charges soared 67% to Rs1.5 during the period under review compared with Rs900 million in the same period last year owing to interest payments.
Margins for petrol and diesel are one of the lowest in the region, however, the chairman appreciated the recent announcement of the government to increase margins in phases.
Published in The Express Tribune, October 22nd, 2011.
Shell switched to a profit of Rs1.12 billion in the first nine months of 2011 compared with a loss of Rs11.5 million in the same period last year.
However, a break-up shows that the country’s second largest oil marketing company did post a loss of Rs284 million in the third quarter of 2011 due to lower sales volume and oil price volatility.
The results are much lower than market expectations as analysts expected nine month net profit to stand at Rs2 billion while quarterly the company was estimated to post a profit.
This was further impacted by soaring financing costs due to surging government receivables and tax rate of 70%, the chairman said in the result review statement.
Sales rose 20% to Rs188 billion during January to September against Rs158 billion posted last year.
Government receivables are now more than Rs14 billion and causing a huge financial surcharge, said the chairman talking about their part in the circular debt in the result review. Since the start of this debt, the second largest oil marketing company has had to pay more than Rs3.5 billion in interest costs.
Financial charges soared 67% to Rs1.5 during the period under review compared with Rs900 million in the same period last year owing to interest payments.
Margins for petrol and diesel are one of the lowest in the region, however, the chairman appreciated the recent announcement of the government to increase margins in phases.
Published in The Express Tribune, October 22nd, 2011.