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SHELL CANADA LIMITED ANNOUNCES 1991 FINANCIAL RESULTS

 SHELL CANADA LIMITED ANNOUNCES 1991 FINANCIAL RESULTS
 CALGARY, Jan. 23 /PRNewswire/ -- Shell Canada's consolidated earnings from continuing operations for 1991 were $12 million or 11 cents per Class "A" common share, compared with $317 million or $2.83 per share for 1990. Return on average capital employed in continuing operations was 1.5 percent, compared with 7.6 percent for 1990. After including the discontinued coal operations, the loss for 1991 was $126 million or $1.12 per share.
 Earnings from continuing operations for the fourth quarter of 1991 were $85 million or 76 cents per Class "A" common share compared with $146 million or $1.31 per share for the fourth quarter of 1990.
 All business units underperformed during 1991. Within Resources, all commodity prices decreased significantly and were only partially offset by improved production volumes for natural gas and natural gas liquids. Oil Products performance was overwhelmed by the loss incurred in the accounting flow-through of high-priced crude oil inventories during a period when product prices fell in the first half of 1991. Intense competition, notably in retail markets, also significantly limited earnings throughout the year. The Chemical markets continued to be weak during 1991.
 Resources earnings for the full year 1991, from continuing operations, were $130 million compared with $153 million for 1990. The decrease was primarily due to lower commodity prices, partially offset by increased volumes for natural gas and natural gas liquids and reduced exploration expenses. Restructuring, cost reduction programs and gains from the sale of non-core assets of approximately $35 million after tax, also reduced the impact of the lower prices. In 1991, natural gas sales volumes reached a record level of 19.4 million cubic meters a day, an increase of four per cent over the prior year. Gross production of crude oil and natural gas liquids increased two percent to 10,100 cubic meters a day, compared with 1990. Sulphur sales volumes were 3905 tons a day, a four percent decrease.
 Oil Products loss of $62 million for 1991 compares with earnings of $153 million for 1990. The earnings decline reflects the inability to recover the cost of high-priced crude inventories acquired late in 1990 and the continuing downward pressure on margins caused by the recession and intense market competition. Petroleum product sales for 1991 increased one percent to 36,500 cubic meters a day, primarily in non-retail markets.
 Chemicals recorded a loss of $11 million for 1991, compared with earnings of $78 million for 1990. 1991 losses reflected a global oversupply of product during a period of recession, the flow-through of high-cost inventory and a strong Canadian dollar. Chemical sales volumes increased five per cent to 2664 tons a day in 1991.
 Corporate expenses were $45 million for 1991, compared with $67 million for 1990. 1990 included a charge of approximately $25 million after tax for the costs of business restructuring.
 Cash flow from continuing operations for 1991 was $361 million. This compares with $770 million for 1990. The decrease resulted from lower earnings.
 Capital and exploration expenditures increased substantially to $988 million for 1991, up from $575 million for 1990. Resources expenditures of $739 million, an increase of $377 million, included approximately $465 million for Caroline development. The balance of the expenditures was for development in major oil and gas complexes, exploration and the acquisition of additional interests in properties related to core operations. Oil Products expenditures of $227 million were primarily for redevelopment of the commercial and retail networks.
 Resources fourth quarter 1991 earnings from continuing operations of $68 million were down from $76 million in 1990. The primary reason was significantly lower prices for all commodities. Offsetting this were gains from the sale of non-core assets of approximately $20 million after tax, and reduced operating expenses.
 Oil Products 1991 fourth quarter earnings were $12 million compared with earnings of $59 million in 1990. These 1991 results reflect the continuing intense competition, primarily in the retail sector, in comparison with higher prices during 1990. Signs of market recovery early in the fourth quarter were offset by significant deterioration of retail prices in the latter part of December.
 Chemicals loss was $1 million for the fourth quarter of 1991 compared with earnings of $23 million in 1990. Although sales volumes were comparable for these periods, 1990 prices were unusually high due to the Arabian Gulf tension. Lower prices, the result of global overcapacity, the recession and the strong Canadian dollar combined to decrease 1991 earnings.
 Improvements in earnings for 1992 and thereafter will depend largely on recovery in the economy, retail gasoline market forces, and the internal strategies that are being implemented to enhance profitability. These strategies include asset rationalization, market restructuring of the retail and agency business and general cost reduction measures. Additional Resources earnings are expected as full production at Caroline is achieved in the first half of 1993.
 On Nov. 20, 1991, the Directors of Shell Canada Limited declared a semi-annual dividend of 45 cents per Class "A" common share. The dividends were payable Dec. 13, 1991, to shareholders of record Nov. 30, 1991.
 1991 results represent the last year in which the First-In, First- Out inventory valuation method will be used. As previously announced, the corporation has adopted the Last In, First-Out (LIFO) method effective Jan. 1, 1992. A movement to LIFO will allow current revenues to be better matched with the current cost of product.
 SHELL CANADA LIMITED AND SUBSIDIARY COMPANIES
 Financial and Operating Highlights
 (Unaudited, restated, $ in millions)
 Periods ended: Fourth quarter Total year
 1991 1990 1991 1990
 Revenues 1,156 1,611 4,787 5,441
 Cash flow from
 continuing operations 142 283 361 770
 Cash from
 operating activities 151 (87) 651 468
 Earnings from
 continuing operations 85 146 12 317
 Earnings (loss) 71 143 (126) 309
 Per Class "A" Common Share (dollars)
 Earnings from
 continuing operations 0.76 1.31 0.11 2.83
 Earnings (loss) 0.64 1.28 (1.12) 2.76
 RESULTS BY SEGMENT
 Revenues
 (excluding inter-
 segment sales)
 Resources 181 255 605 748
 Oil Products 822 1,118 3,504 3,865
 Chemicals 148 227 642 769
 Corporate 5 11 36 59
 Total 1 156 1 611 4 787 5 441
 Earnings
 Resources 68 76 130 153
 Oil Products 12 59 (62) 153
 Chemicals (1) 23 (11) 78
 Corporate 6 (12) (45) (67)
 Total 85 146 12 317
 Capital and
 exploration expenditures
 Resources 225 96 739 362
 Oil Products 71 54 227 148
 Chemicals 1 3 5 9
 Corporate 4 7 17 56
 Total 301 160 988 575
 Fourth Quarter Total Year
 Operating Highlights 1991 Change 1991 Change
 (percent) (percent)
 Crude oil and natural gas
 liquids produced
 gross (m3/d) 10,700 -- 10,100 +2
 Natural gas sales from own
 production - gross
 (thousands of m3/d) 21,900 -1 19,400 +4
 Sulphur produced - gross
 (tons/d) 3,849 -4 3,510 +4
 Sulphur sales from own
 production - gross
 (tons/d) 4,381 -9 3,905 -4
 Crude oil processed by
 Shell refineries
 (m3/d) 42,900 -2 40,700 -
 Petroleum product sales
 (m3/d) 37,200 +5 36,500 +1
 Chemical sales
 (tons/d) 2,628 -1 2,664 +5
 -0- 1/23/92
 /CONTACT: Gary Sherkey, manager-investor relations of Shell Canada, 403-691-2175/
 (SHC.) CO: Shell Canada Limited ST: Alberta IN: OIL SU: ERN


TS -- NY015 -- 2620 01/23/92 08:47 EST
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