The profit of Shell Pakistan Ltd, country's second largest oil supplier, in the six months ended on December 31, 2003, may range between Rs 650 million and Rs 740 million, down from same period a year ago because it lost market share of motor gasoline and high speed diesel.
The company is to announce financial results for the first half of the current fiscal year on Monday.
The company is to release its accounts through Karachi Stock Exchange and is expected to announce before 1 pm.
Abdullah Amin, research analyst from AKD Securities, said that Shell continues to lose market share to PSO in the Mogas (motor gasoline) and High Speed Diesel categories.
The recent aggressive marketing drive by PSO through fleet cards and corporate credit cards is the primary reason for the declining market share.
"We expect the company to announce dividend of Rs 10 to Rs 14 per share. For the full year, our forecast is Rs 35 per share, a prospective dividend yield of 8.2 percent," he said.
An analyst from Investcapital Securities expects Shell to announce profit after tax of Rs 705 million-Rs 74 million (EPS Rs20.0-21.0) for 1HFY04 compared to after-tax profit of Rs 848 million (EPS of Rs24.2) during 1HFY03.
The company has already announced a profit after tax of Rs 370 million (EPS of Rs10.5) during 1QFY04. "We expect 2QFY04 profit of Rs 335 million - Rs 370 million (EPS of Rs9.5-10.5)."
The recent decline in furnace oil sales is not expected to substantially affect Shell's profitability, since only 10 percent of the company's total revenue comes from furnace oil sales.
According to Shell management, the company is likely to maintain high payout as long as no new investment opportunity comes up. However, the company has historically paid majority of dividend with full year results.
"Therefore, we expect Shell to pay dividend of Rs9.0-10.0/share with 1HFY04 results."
During 1HFY04, average Arabian light crude oil prices were around $26.6 a barrel. These were 8 percent higher than 1HFY03 average prices of $24.9 a barrel.
During 2HFY03, average Arabian light crude oil prices were a little higher at $27.4 a barrel due to Iraq War.
The local POL prices are revised fortnightly based on oil price trend in the global market. Due to this, in line with global crude prices, domestic POL prices remained higher.
During 1HFY04, average retail price of HSD at Rs 21.32 per litre was higher by 6.23 percent compared to Rs 20.07 per litre during 1HFY03.
Average prices of Kerosene Rs 20.74 per litre and LDO Rs 17.18 per litre were higher by 11.37 percent and 3.68 percent, respectively.
The average retail price of mogas, however, was lower due to tax rationalisation by the government.
During 1HFY04, average retail price at Rs 32.05 per litre was lower by 4.3 percent compared to Rs 33.49 per litre during 1HFY03.
Furnace oil prices declined marginally from Rs 12,215 per ton during 1HFY03 to Rs 12,171 per ton during 1HFY04.
Comments
Comments are closed.