FINA REPORTS FOURTH QUARTER, ANNUAL RESULTS
FINA REPORTS FOURTH QUARTER, ANNUAL RESULTS DALLAS, Jan. 30 /PRNewswire/ -- FINA, Inc. (AMEX: FI) today reported
net earnings of $21.8 million for the fourth quarter of 1991, up 14 percent from the same period in 1990. Fourth quarter revenues were $859.1 million, down 28 percent from the previous year.
Net earnings for the full year were $42.0 million in 1991, down from $125.5 million in 1990. Annual revenues for the year were $3.3 billion, a 16 percent drop from the previous year. Ron W. Haddock, FINA's president and chief executive officer, said, "FINA's improved earnings in the fourth quarter represented relatively good news in a year that was difficult and challenging for us. "The lower profits for the year were due mainly to discretionary actions taken by the company to improve future earnings and to various business environment factors, including the Gulf War, lower natural gas prices and lower chemicals margins brought about by the economic recession and significant new industry capacity." The discretionary actions included the shutdown of several units at the company's Port Arthur, Texas, refinery for a number of months to complete a $230 million modernization and expansion project and the curtailment of some natural gas production. The company took numerous steps during the year to improve short- term profitability and increase efficiency to help position it for a continued challenging business environment in 1992. In the Upstream, annual earnings were down due to a 17 percent drop in the average wellhead price for the company's crude oil and natural gas production and slightly lower crude volumes due to normal field declines and the sale of marginal properties. Natural gas prices reached a 15-year low during the year following a warmer than normal 1990-91 winter heating season and reflecting soft demands associated with the weak economy. Haddock said, "Our successful drilling program, for the second consecutive year, replaced our production. Reserve additions were a record 20.7 million barrels of oil equivalent, increasing the company's net reserves to 168.5 million barrels of oil equivalent." The company participated in 50 net exploratory wells with a success rate of 64 percent and 37 net development wells with a success rate of 99 percent. "Our natural gas sales increased 24 percent to 132 billion cubic feet," said Haddock. "This was mainly achieved through higher sales of third-party gas. Also, natural gas processing and futures trading made substantial contributions to earnings." In the Downstream, earnings were down significantly due to the planned refinery downtime to tie-in the modernization and expansion project, lower industry margins and write-down of inventory values when crude prices fell after the start of Operation Desert Storm in January 1991. Haddock said, "The Fuel Products Modernization project at Port Arthur, which increased the yield of higher value products at reduced unit cost, will contribute significantly to improved earnings. The project was completed at mid-year, and throughput at the company's two refineries increased to a record 201,000 barrels per day during the second half, a 35 percent increase from the first half. The new units performed at rates well above design." In Marketing, consumers last year continued to respond favorably to FINA's image and product quality improvements as branded gasoline sales volumes increased. even though the company was consolidated and restructuring operations and overall consumer demand for gasoline was falling. In Chemicals, profits were lower than in 1990 due mainly to lower styrene and polypropylene industry margins, reflecting industry capacity and lower demands. Although the economic recession softened demand for petrochemicals, FINA accomplished record sales and production volumes of polystyrene and polypropylene as the company captured a larger market share. Haddock, in reviewing the year, said, "During 1991, we took numerous steps to improve profitability, including a major cost reduction program that, among other things, streamlined our organization, postponed drilling which could be done later without penalty and reduced various administrative and overhead costs throughout the company. As a result, the company's overall operating costs ended the year almost $30 million lower than in 1990. "In addition, we are selling non-strategic Upstream and Downstream assets. In 1991, we sold about 320 production properties that were either marginally profitable, had little upside potential for future exploration, or were not strategically located. "We are also evaluating the sale of Fin-Tex Pipeline Company, which is surplus to our supply and transportation needs. "In marketing, we continue to consolidate and restructure operations. We are divesting our Florida and Midwest company-operated retail outlets and have reduced emphasis on branded wholesale operations in lower priority markets. At the same time, we are strengthening our company-operated retail business in Dallas/Fort Worth and Minneapolis/St. Paul and our branded wholesale operations in Florida and in Texas and the surrounding states. "We know that 1992 promises additional challenges if the economy continues to struggle. However, we also know that the steps we took in 1991 to reduce costs and improve effectiveness, as well as the major modernization projects in our refining operations, have positioned us well to be even more competitive in the future." A comparative summary of the company's unaudited results vs. 1990 follows: FINA, INC. Three months ended Dec. 31 1991 1990 Sales and other operating revenues $859,068,000 $1,194,681,000 Net earnings 21,793,000 19,068,000 Earnings per share $1.40 $1.23 Average shares outstanding 15,545,920 14,498,605 12 months ended Dec. 31 1991 1990 Sales and other operating revenues $3,336,353,000 $3,978,202,000 Net earnings 42,008,000 125,543,000 Earnings per share $2.71 $8.11 Average shares outstanding 15,529,533 15,480,325 FINA, Inc., based in Dallas, engages in crude oil and natural gas exploration and production and natural gas marketing; petroleum products refining, supply and transportation, and marketing; and chemicals manufacturing and marketing. Organized in 1956, it is part of an international group of companies affiliated with Petrofina S.A., which is headquartered in Brussels, Belgium. -0- 1/30/92 /CONTACT: Rick Hagar of FINA, 214-750-4120/ (FI) CO: FINA ST: Texas IN: OIL SU: ERN SM -- NY066 -- 5261 01/30/92 12:55 EST
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|Date:||Jan 30, 1992|
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