news24.com 02/05/2003 12:56  - (SA)  

London - Anglo-Dutch oil giant Royal Dutch/Shell Group saw its profits nearly double in the first three months of the year when it benefited from rising oil prices before the war in Iraq, the company said on Friday.

Net earnings, based on the current cost of supplies and excluding special items, rose to $3.914bn, an increase of 96% from the equivalent figure last year, Shell said.

"The earnings reflected significantly higher hydrocarbon prices," among other factors, the company said in a statement.

According to Shell's own statistics, the price of Brent crude oil averaged $31.50 a barrel over the quarter as against $21.15 in the same period last year.

World oil prices rocketed at the start of the year as tensions in the Middle East mounted ahead of the US-led war to unseat Iraqi leader Saddam Hussein.

Prices were also forced up by strike action in Venezuela and unrest in Nigeria which saw around a third of the country's crude exports halted.

On Tuesday, British oil giant BP reported a record first-quarter profit of $3.73bn, up 136%, which it also put down to strong oil prices.

Fri May 2, 2003 06:24 AM ET By Andrew Callus

LONDON (<a href=reuters.com>Reuters) - Royal Dutch/Shell joined its giant oil industry rivals in reporting record quarterly profits on Friday after war in Iraq, civil unrest in Nigeria and strikes in Venezuela stoked crude oil prices.

The world's second largest oil company said net profit adjusted to reflect the current cost of supply and other one-off items soared 96 percent year-on-year to $3.914 billion in the first quarter of 2003.

The result was above a range of analysts' expectations and the biggest profit Shell has ever turned in. Excluded from the adjusted figure was the impact of a $1.7 billion gain from the sale of 14.75 percent stake in German gas distributor Ruhrgas to German utility E.ON.

The news had little impact on its shares. Investors had come to expect a forecast-beating figure after results from the company's two main rivals earlier in the week, and their minds are now focused on the fall that has taken place in crude oil prices since the quarter's end, to below $25 a barrel from an average of over $30.

"If they hadn't been at the top of the range that would have been a disappointment," said analyst Peter Hitchens of French broker Cheuvreux.

Shares in Dutch arm Royal Dutch and London-listed Shell were slightly higher, up 0.7 percent and one percent respectively at 6:16 a.m. EDT, slightly outperforming the DJ Stoxx energy index, which was up 0.3 percent.

H1 BUYBACK STILL "UNLIKELY"

Analysts said its downstream gas and power result was a little better than expected, but one said the absence of any comment on the possible restart of share buybacks was "disappointing." Officials said the company's February position that a buyback was "unlikely in the first half" remained the case. Earlier this week, world oil numbers one and three Exxon Mobil and BP each delivered record first-quarter earnings. Exxon's more than tripled from a year ago (though its figures included the sale of its Ruhrgas stake) while BP's were up 132 percent.

War in Iraq and civil unrest in Nigeria threatened supplies of crude oil and took the average price of crude to a 12 year high in the quarter. Some of Shell's production was shut in Nigeria and still is, but the effect of the oil price far outweighed this.

Strikes in another oil producing nation, Venezuela, helped the crude price too and shut in fuel exports to the United States, sending the price of gasoline and other products soaring. Of the top three Shell is the leader in squeezing profits from refining and marketing.

Strong U.S. natural gas prices completed the rosy picture for the industry, producing some of the biggest quarterly corporate earnings hauls in history. The results were made all the more striking by tumbling earnings across other industries as economies slow around the world.

UNDERLYING GROWTH FLAT

Shell also produced six percent growth in oil and gas production in the quarter from a year earlier to 4.2 million barrels a day. However this included the acquisition of Enterprise Oil last year.

Underlying growth was flat, in line with recent forecasts from the company, and Shell officials told Reuters that the forecast of 4.1 million barrels a day for 2003 as a whole this year remained intact along with its three percent a year longer term output growth target.

sky.com

The world's second largest oil company said net profit adjusted to reflect the current cost of supply and other one-off items soared 96% year-on-year to £2.46bn.

The result was above a range of analysts' expectations and the biggest profit Shell has ever turned in.

Earlier this week, world oil numbers one and three - Exxon Mobil and BP - each delivered record first quarter earnings.

Oil strife

Exxon's more than tripled from a year ago while BP's were up 132%.

War in Iraq and civil unrest in Nigeria threatened supplies of crude oil and took the average price of crude to a 12 year high.

Some of Shell's production was shut in in Nigeria but the effect of the oil price outweighed this.

Strikes in another oil producing nation, Venezuela, helped the crude price too and shut in fuel exports to the US, sending the price of gasoline and other products soaring.

Rosy picture

Strong US natural gas prices completed the rosy picture for the industry, producing some of the biggest quarterly corporate earnings hauls in history.

The results were made all the more striking by tumbling earnings across other industries as economies slow around the world.

Shell also produced 6% growth in oil and gas production in the quarter from a year earlier to 4.2m barrels a day.

Last Updated: 11:02 UK, Friday May 02, 2003

By Toby Anderson

London, May 2 (<a href=quote.bloomberg.com>Bloomberg) -- U.K. stocks advanced, paced by oil companies as Shell Transport & Trading Co. reported first- quarter profit that beat analysts' forecasts.

Unilever, the world's largest food and soap maker, fell after saying sales of its 400 leading brands rose less than it forecast.

The FTSE 100 Index climbed 12.8, or 0.3 percent, to 3892.9 as of 10:41 a.m. in London. The index has added 0.6 percent this week and in April posted its largest monthly gain since September 1997. The FTSE All-Share Index rose 0.3 percent to 1877.19 today.

The following stocks are making significant gains or losses today. Stock symbols are in parentheses after company names.

EasyJet Plc (EZJ LN) dropped 11p, or 6 percent, to 174. Martin Borghetto, an analyst at Morgan Stanley, cut his recommendation for Europe's largest low-cost airline to equal- weight/in-line'' from overweight/in-line'' because of concern about competition from rivals.

The ``endurance of traditional carriers puts the longer-term market opportunities for low-cost carriers focused on main hubs into doubt,'' Borghetto said in a note to investors.

Enact Plc (ENA OF) tumbled 5p, or 26 percent, to 14.5. Protherics Plc, a maker of antidotes for snake bites, said it will pay 7.9 million pounds ($12.7 million) for Enact, a maker of cancer treatments. Protherics (PTI LN) added 0.7p, or 0.4 percent, to 17.5.

Homestyle Group Plc (HME LN) dropped 2p, or 1.7 percent, to 118.5. Britain's largest bed and curtain retailer said it may have to pay 15 million pounds in unpaid taxes on the so-called structural guarantees it offers customers on goods such as sofas.

London Clubs International Plc (LCI LN) added 0.75p, or 2.9 percent, to 26.5. The owner of casinos in countries including Egypt and South Africa sold its Palm Beach Club unit to rival Stanley Leisure Plc for 36.25 million pounds. Stanley Leisure (SLY LN) shares slipped a penny, or 0.4 percent, to 270.5p.

Pace Micro Technology Plc (PIC LN) jumped 2p, or 5.4 percent, to 39. The maker of television set-top boxes for clients including British Sky Broadcasting Group Plc named John Dyson as its chief executive officer.

Shell Transport & Trading Company Plc (SHEL LN) added 4.25p, or 1.1 percent to 376.5p. The owner of 40 percent of Royal Dutch/Shell Group said first-quarter profit almost doubled to a record because oil prices surged as war in Iraq loomed and a strike in Venezuela curtailed supplies.

Profit before special items and changes in the value of inventories increased to $3.91 billion from $1.99 billion a year earlier. The result beat the average estimate of $3.67 billion from analysts surveyed by Bloomberg News.

Unilever (ULVR LN) dropped 41p, or 6.8 percent, to 566. The world's biggest food and soap maker said sales of its 400 leading brands, such as Knorr soups and Breyers ice cream, rose 3 percent, which was less than it forecast.

First-quarter profit surged 45 percent to 637 million euros ($716 million). Revenue excluding exchange-rate fluctuations fell 4 percent to 11.1 billion euros. Last Updated: May 2, 2003 05:44 EDT

By Alex Lawler

London, May 2 (<a href=quote.bloomberg.com>Bloomberg) -- Royal Dutch/Shell Group, Europe's largest oil company, said first-quarter profit almost doubled to a record because oil prices surged as war in Iraq loomed and a strike in Venezuela curtailed supplies.

Profit, before special items and changes in the value of inventories, increased to $3.91 billion from $1.99 billion a year earlier, Shell said in a statement on PR Newswire.

Shell's result is higher than the average estimate of $3.67 billion, according to a Bloomberg survey of 13 analysts. Forecasts ranged from $3.14 billion to $3.8 billion. Last Updated: May 2, 2003 05:04 EDT