Shell earns Rs59.5 million in April-June quarter
Shell Pakistan comes out of the red in 3Q, but chairman says long way to go.
The multinational petroleum company was able to record better performance on back of higher sales and a tight control over its expenses, especially financing costs. PHOTO: FILE
KARACHI:
Shell Pakistan Limited posted a profit of Rs59.53 million for the third quarter (April-June 2013), a major improvement over the loss of Rs1.764 billion it incurred in same period last year.
As a result, losses for the six month period from January to June 2013 fell by 96% to Rs65.8 million compared with Rs1.988 billion suffered in first half of 2012.
The multinational petroleum company was able to record better performance on back of higher sales and a tight control over its expenses, especially financing costs.
Fiscal results, which were released to the Karachi Stock Exchange, came along with a detailed statement of Shell Pakistan’s Chairman and CEO Omar Sheikh who complained about tough business conditions in the country.
“We continue to be affected by very low regulated fuel margins, an unfair turnover tax mechanism and continued financing cost of government receivables,” he said.
During first half of the year, the company received Rs1.526 billion from government under different heads but it still awaits payment of over Rs6.9 billion in sales tax refunds, petroleum development levy, subsidies and imported purchases. These receivables have been pending for one to 10 years.
Referring to the April 2013 raise in margin on petrol and diesel that oil marketing companies get in rupee terms on sale of a litre of fuel, Sheikh said “Currently, these margins are not at a level sufficient to cover steadily rising direct costs of operations and high cost of financing required for investment in stocks and business assets,” adding that these regulated margins stand lowest in the region.
Shell’s statements highlighted the continuous repercussions of turnover tax, which is eating the industry’s profit.
Published in The Express Tribune, August 23rd 2013.
Shell Pakistan Limited posted a profit of Rs59.53 million for the third quarter (April-June 2013), a major improvement over the loss of Rs1.764 billion it incurred in same period last year.
As a result, losses for the six month period from January to June 2013 fell by 96% to Rs65.8 million compared with Rs1.988 billion suffered in first half of 2012.
The multinational petroleum company was able to record better performance on back of higher sales and a tight control over its expenses, especially financing costs.
Fiscal results, which were released to the Karachi Stock Exchange, came along with a detailed statement of Shell Pakistan’s Chairman and CEO Omar Sheikh who complained about tough business conditions in the country.
“We continue to be affected by very low regulated fuel margins, an unfair turnover tax mechanism and continued financing cost of government receivables,” he said.
During first half of the year, the company received Rs1.526 billion from government under different heads but it still awaits payment of over Rs6.9 billion in sales tax refunds, petroleum development levy, subsidies and imported purchases. These receivables have been pending for one to 10 years.
Referring to the April 2013 raise in margin on petrol and diesel that oil marketing companies get in rupee terms on sale of a litre of fuel, Sheikh said “Currently, these margins are not at a level sufficient to cover steadily rising direct costs of operations and high cost of financing required for investment in stocks and business assets,” adding that these regulated margins stand lowest in the region.
Shell’s statements highlighted the continuous repercussions of turnover tax, which is eating the industry’s profit.
Published in The Express Tribune, August 23rd 2013.