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| Accounting result for 2004 1H |
| 11/08/2004 |
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The ordinary profit of 2004 1H is 21.0 billion yen, 3.2 billion yen higher than 2003 1H. (6.0 billion yen increase compared with the estimate announced previously).
Interim dividend is 15 yen / share, 5 yen / share higher than that in 2003 interim.
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1. Main indicators
| [Consolidated] |
| Unit: ¥Mln |
| Sales Proceeds | 877,734 | vs.2003 1H
+1,061 (+0.1%) |
| Operating profit | 21,615 |
+3,531 (+19.5%) |
| Ordinary profit | 21,052 |
+3,251 (+18.3%) |
| Ordinary profit (CCS basis) | 9,312 |
-8,240 (-46.9%) |
| NIAT | 12,081 |
+2,780 (+29.9%) |
| [Unconsolidated] |
| Unit: ¥Mln |
| Sales volume | 19,986 KKL | vs.2003
1H -498KKL (-2.4%) |
| Sales proceeds | 846,896 |
-66 (0.0%) |
| Operating profit | 19,229 |
+3,260 (+20.4%) |
| Ordinary profit | 20,362 |
+3,363 (+19.8%) |
| Ordinary profit (CCS basis) | 8,622 |
-8,128 (-48.5%) |
| Net income | 12,419 |
+3,071 (+32.9%) |
CCS: Current Cost of Supply / calculation based on the cost excluding stock evaluation effects
2. Business Outline
(1) Domestic economy and industrial environment
The Dubai crude oil price, which was at $28 per barrel at the beginning of the period, soared even to the level of $36 per barrel in May, as the global peroleum demand increased constantly especially in the U.S. and China, and the fund money flowed into the crude oil future markets with a backdrop of uneasiness caused by repeated attacks by terrorists. Thereafter, the oil market showed some weakness after the OPEC decided a production increase in June, and the Dubai crude oil price was at $31 per barrel at the end of the period.
In the domestic oil markets, the demand for gasoline continued to increase steadily, and the demand for gas oil increased after years of decline, due mainly to improved transportation demand. The demand for kerosene decreased when compared with the last year, because the weather in the first quarter was mild. The demand for the A fuel increased as the economy recovered, but the demand for the C fuel oil used for power generation dramatically decreased, as nuclear power plants were reactivated.
With regard to product prices, the gasoline price dramatically rose because of the sharp rise in the crude oil price and low stock level resulting from refinery shutdowns in the second quarter. The price of gas oil and the A fuel oil, however, did not fully correspond to the rise in crude oil price.
(2) Business activities
[Marketing policy]
We continued to invest selectively in self-service retail facilities. We also expanded the sales territory for the "Shell Pura" brand high-octane gasoline to the San-in district, making its coverage ratio at 73% in the Company's high-octane gasoline sales. As for the "Starlex" credit card targeted for individual clients, we have secured approximately 80 thousand new customers, making the number of memberships at approximately 1.3 million. We also obtained more than 6 thousand new customers for the "Shell Business Card", making the number of business memberships at approximately 28,500.
[Manufacturing]
We enhanced safe and effective operation in the Company's group refineries and improved the yield of higher-value products in order to strengthen our competitiveness.
[Distribution]
We have been promoting the joint management of depots and product exchanges with other oil companies. We have been also seeking further efficiency in logistics by the introduction of larger product carrying vessels and nighttime lorry deliveries.
[Health, Safety & Environment]
With regard to health, safety, security and environment, we have endeavored to enhance management systems in each segment, improve our risk management and reinforce our crisis management system.
[New Business]
In relation to new business development, we have integrated our solar cell business into Shell Solar Japan K.K., a joint venture between the Company and Shell Solar. We continued to carry out the experimental operation of vehicles fueled by newly developed GTL (gas to liquid) fuel. We have been also operating a hydrogen supply station to experiment the practicability of fuel cell vehicles.
3. Profit and loss
[Consolidated]
Total sales proceeds were ¥877.7 billion, almost same as the corresponding period last year because selling prices rose and the sales volume of gasoline and gas oil increased, although the sales volume of kerosene and fuel oils decreased.
The Profit and Loss Statement shows that the ordinary profit was ¥21.0 billion, a increase of ¥3.2 billion over the same period last year. This was the result of higher stock profit in this period, when compared with the first half of 2003.
[Unconsolidated]
Total sales proceeds were ¥846.8 billion. Operating profit, ordinary profit and NIAT were ¥19.2 billion (20.4% increase), ¥20.3 billion (19.8% decrease) and ¥12.4 billion (32.9% increase) respectably.
4. Dividend
We will pay an interim dividend of 15 yen per share (5 yen per share increase compared with the last interim dividend), and plan to pay a total dividend for the year of 30 yen per share.
5. Estimation of YR2004
We are assuming a crude oil price of $34barrel and exchange rate of 110.0 yen /US$ for year 2004. Based on these premises, we revise business forecast 2004 as follows.
[Consolidated basis]
| Sales |
¥1,810 bln |
| Ordinary Profit |
¥38 bln |
| Ordinary Profit (CCS) |
¥25 bln |
| Net Income |
¥21 bln |
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[Un-consolidated basis]
| Sales |
¥ 1,750bln |
| Ordinary Profit |
¥ 35 bln |
| Ordinary Profit (CCS) |
¥ 22 bln |
| Net Income |
¥ 21 bln |
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*Compared to the previous forecasts
[Consolidated basis]
| Sales |
+¥ 90 bln |
| Ordinary Profit |
+¥ 6 bln |
| Ordinary Profit (CCS) |
-¥ 15 bln |
| Net Income |
+¥ 3 bln |
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[Un-consolidated basis]
| Sales |
+¥ 100bln |
| Ordinary Profit |
+¥ 7 bln |
| Ordinary Profit (CCS) |
-¥ 14 bln |
| Net Income |
+¥ 5 bln |
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