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 LONDON, Sept. 2 /PRNewswire/ -- Burmah Castrol plc (NASDAQ: BURMY) today reported financial results for the six months ended June 30, 1993. In the first half of 1993, Burmah Castrol increased profit after tax and minorities to 44.8 million pounds sterling, after adjusting for FRS 3 and UITF 9. Earnings per share rose by 18 percent to 23.8 pence.
 Amongst the core divisions, Lubricants maintained its upward path. Volumes and gross margins increased despite lower market demand. Profit rose 15 per cent after additional revenue expenditure on long-term international marketing and technology projects. Castrol Syntec, launched in the USA in September 1992, is making encouraging progress and is on target to contribute to profit from 1994. Geographically, there were particularly good results from Asia and North America while, in Europe, the resilience of Castrol's consumer business offset the sharp decline in industrial markets.
 Chemicals showed a 5 percent increase in profit despite the severe impact of the European recession on its Metallurgical division, where rationalization of the manufacturing base is well advanced. Fuels profits were 14 percent up, after excluding an exceptional profit received from the flotation of part of the Turkish joint venture in 1992.
 Profit before tax was up 12 percent. Interest cover improved to 5.7 times. There was a substantial reduction in the tax rate, and profit after tax rose by 24 percent.
 First half 1993 figures are stated in accordance with the accounting requirements of FRS 3 and of the more recently issued UITF 9, which clarifies the treatment of profits from hyperinflationary economies. The effect of UITF 9 has been to reduce half year 1993 profit after tax and minorities by 1.7 million pounds. The impact on full year 1993 results is likely to be around 9 million pounds. The results for first half 1992 and full year 1992 have been correspondingly adjusted. Hitherto, under SSAP 20, hyperinflationary adjustments not charged to the profit and loss account were dealt with as exchange movements in reserves. The UITF 9 changes have a negligible impact on cash flow and the balance sheet.
 The Board is recommending that an enhanced share alternative to the interim cash dividend be offered to shareholders in the form of new ordinary shares. At an equivalent value of 24.75 pence, this alternative is worth 50 percent more than the interim cash dividend of 16.5 pence. This interim cash dividend, which will be paid earlier than usual, is equivalent to the 1992 final cash dividend and represents a reversal of the relative sizes of the interim and final cash dividends paid in previous years. No decision has been made at this stage as to the amount of the final dividend for 1993. Further details of the enhanced share alternative are contained in the appendix to this announcement.
 If shareholders take up the enhanced share alternative to the interim cash dividend in full, earnings this year will be improved by about 4 pence per share. There will also be benefits in 1994 to net gearing of some 10 percent.
 The Chairman, Lawrence Urquhart, commented:
 "These results, while benefiting from significant currency translation gains, confirm the strengths of Burmah Castrol's businesses and the advantages of their wide international spread. In Lubricants, we have continued to put revenue investment into geographic expansion, marketing initiatives and product development programs. In Chemicals, we have taken further action to reduce manufacturing costs.
 "Looking ahead, conditions in the second half are likely to be similar to the first, with recession in continental Europe counterbalanced by more favorable conditions in the rest of the world. Next year, performance from our core divisions will be aided by Castrol Syntec's expected move into profit and Metallurgical Chemicals' benefiting from its cost reduction program. An upturn in key European economies would provide additional gains. With our focused strategy and sound financial base, the outlook is encouraging."
 Brian Hardy Director, Finance --
 James Alexander Corporate Affairs Director -- 071 499 9533
 Delia Ponter Public Affairs Manager --
 Half year Half year Year to
 to 6/30/93 to 6/30/92 12/31/92
 million pounds million pounds million pounds
 Continuing operations 1354.6 1136.5 2377.6
 Discontinued operations -- 26.5 31.6
 Lubricants 70.8 61.5 127.2
 Chemicals 17.8 16.9 34.0
 Fuels 13.6 13.8 27.2
 LNG Transportation 7.0 6.6 16.3
 Energy Investments 3.7 3.8 7.9
 Central Management (5.8) (4.7) (9.8)
 Continuing operations 107.1 97.9 202.8
 Discontinued operations -- 1.7 0.9
 Profit on disposal of
 discontinued operations 2.6 -- --
 109.7 99.6 203.7
 INTEREST (19.2) (19.0) (39.8)
 Taxation (37.6) (37.8) (77.3)
 Minority interests (8.1) (5.6) (12.5)
 TO SHAREHOLDERS 44.8 37.2 74.1
 SHARE 23.8 pence 20.2 pence 39.9 pence
 INTEREST COVER 5.7x 5.2x 5.1x
 BEFORE TAXATION 42 percent 47 percent 47 percent
 (i) Following publication of the Urgent Issues Task Force
 Abstract No. 9, the directors have reviewed the methods
 previously adopted by the group to adjust the results, prior
 to consolidation, of subsidiary and associated undertakings
 operating in hyperinflationary economies. The effect of
 this review has been to modify the adjustment necessary to
 remove the influence of hyperinflation from the group's
 results. Corresponding amounts for the half year to June
 30, 1992 and the year to December 31, 1992 have been
 adjusted, reducing profit after tax and minorities by 3.2
 million pounds and 11.4 million pounds respectively. In
 addition, profit after tax and minorities for the half year to
 June 30, 1992 has been reduced by 1.2 million pounds,
 representing an amendment to the calculation of profits on the
 sale of revalued properties in accordance with Financial
 Reporting Standard No. 3 which was first adopted for the
 accounts to December 31, 1992. There have also been certain
 minor reclassifications between operating profit and interest.
 (ii) The weighted average number of ordinary shares in issue
 during the period used in the calculation of earnings per
 ordinary share was 186.1 million (1992 half year 182.1
 million; full year 183.0 million).
 (iii) Results for the two half years have not been audited, but
 the results for the half year to June 30, 1993 have been
 reviewed by the auditors, whose report thereon is attached.
 (iv) The statutory accounts for the year to December 31, 1992,
 which received an unqualified auditors' report, have been
 filed with the Registrar of Companies. The figures for that
 period included in this summary of results do not constitute
 statutory accounts within the meaning of Section 240 of the
 Companies Act 1985.
 June 30, 1993 June 30, 1992
 million pounds million pounds
 Fixed assets 868 793
 Net current assets 310 127
 Total assets less
 current liabilities 1,178 920
 Other liabilities 550 369
 Net assets 628 551
 Shareholders' funds 568 503
 Minority interests 60 48
 628 551
 Net debt 359 325
 percent percent
 Net gearing - convertible capital
 bond treated as debt 63 65
 - convertible capital
 bond treated as equity 49 48
 Half year to Half year to
 June 30, 1993 June 30, 1992
 million pounds million pounds
 Net cash inflow from operating
 activities 109 83
 Net interest and dividends (32) (30)
 Tax paid (35) (27)
 Capital expenditure - net of sales
 of fixed assets (40) (37)
 Net cash inflow/(outflow) before
 and financing 2 (11)
 (Acquisitions)/disposals (21) 35
 Net cash (outflow)/inflow before
 financing (19) 24
 Net (repayment of)/proceeds from
 borrowings (25) 1
 Issue of shares 34 1
 Net cash inflow from financing 9 2
 Net (decrease)/increase in cash and
 cash equivalents (10) 26
 Key average rates of exchange used in these accounts are:
 Half Year to June 30 Full Year
 1993 1992 1992
 US Dollar 1.51 1.81 1.76
 Deutsche Mark 2.45 2.89 2.74
 If first half 1992 results had been translated at first half 1993 average exchange rates, then first half 1992 turnover, operating profit and profit after tax and minorities would have been 134 million pounds, 16 million pounds and 9 million pounds higher respectively.
 Turnover in continuing operations rose by 19 percent to 1,354.6 million pounds. Turnover in discontinued operations in 1992 relates to the Abrasives, Diamond Products and Ceramics businesses sold last year.
 Lubricants. Operating profit increased by 9.3 million pounds to 70.8 million pounds. While this improvement includes exchange rate translation gains, there was significant underlying profit growth in Asia, particularly in India and Thailand; in Southern Hemisphere, with recovery in Australia and South Africa; and in North America. The adverse impact of Castrol Syntec was just over 3 million pounds, as expected. Europe maintained its profit contribution in local currency terms. Worldwide automotive and industrial volumes each grew by 4 percent, while marine volumes advanced by 2 percent. Marketing and technology expenditure was increased.
 Chemicals. Operating profit increased by 0.9 million pounds to 17.8 million pounds. Printing Inks showed a substantial improvement, particularly in the UK and continental Europe, and Construction and Mining also advanced, benefiting from the high level of building activity in the Middle East. The Coatings and Adhesives businesses improved their profits but Metallurgical suffered, principally as the result of the European recession, although this was mitigated by an encouraging upturn in North America. Metallurgical's rationalization program is now well under way, although the benefits will not be seen until 1994.
 Fuels. Operating profit, at 13.6 million pounds, was virtually unchanged from the 1992 first half, despite the latter having benefited from the 1.9 million pound gain on the disposal of a minority stake in the Turkish operation. Profits advanced in Australia on network expansion, as well as in Turkey, while profit in the UK was maintained on lower volumes.
 LNG Transportation. Operating profit increased slightly to 7.0 million pounds, reflecting exchange gains on translation.
 Energy Investments. Operating profit, virtually unchanged at 3.7 million pounds, largely arose in Pakistan Petroleum Limited following the sales of trade investments in that country. Negotiations for the sale of the remaining investments in Pakistan are continuing.
 Central Management. Financial restructuring costs and adverse currency effects on overseas corporate offices, coupled with other exchange differences, accounted for the major part of the increase.
 Profit on disposal of discontinued operations arose principally from sales of investments in Pakistan during the first half of 1993.
 The charge for net interest, at 19.2 million pounds, was little changed. Lower rates of interest largely offset the effects of higher average borrowings and adverse exchange rate movements.
 Net interest cover showed a further improvement, to 5.7 times, from the level of 5.2 times in the first half of 1992.
 Profit before taxation increased by 9.9 million pounds to 90.5 million pounds. The charge for taxation, at 37.6 million pounds, was little changed but the effective rate declined by over five points, to 41.5 percent, due to increased UK taxable income and the reduction in the rate of Advance Corporation Tax. However, no benefit has been included in the half year tax charge from the proposed enhanced share alternative to the interim dividend which, if fully taken up by shareholders, will reduce the tax charge in full year 1993 by 7.7 million pounds.
 Minority interests have risen to 8.1 million pounds, and reflect the higher earnings in Castrol India and Thailand.
 Profit attributable to shareholders rose by 7.6 million pounds (20 percent), to 44.8 million pounds, and earnings per ordinary share increased by 18 percent, to 23.8 pence.
 Net assets increased by 77 million pounds, to 628 million pounds, largely due to the effects of exchange rate movements.
 The 183 million pound increase in net current assets, principally in cash balances, was largely matched by the 181 million pound increase in other liabilities, reflecting the debt restructuring program put in place in the second half of 1992. There was only a modest increase in working capital, notwithstanding the Tribol acquisition.
 Net debt increased by 34 million pounds to 359 million pounds, largely due to currency translation effects in second half 1992.
 Shareholders' funds increased by 65 million pounds to 568 million pounds, and included the vendor placing of ordinary shares to finance the acquisition of Tribol. Net capital gearing was reduced by 2 points, to 63 percent (49 percent with the Convertible Capital Bond considered as equity).
 The 26 million pound increase in net cash inflow from operating activities was due both to the profit increase and to a smaller increase in working capital. Net cash inflow before acquisitions, disposals and financing was 2 million pounds, compared with the 11 million pound outflow in first half 1992. Acquisitions net of disposals largely comprised the 32 million pound acquisition of Tribol and 13 million pound proceeds from the sales of Pakistan investments. The 34 million pound issue of shares included the 32 million pound vendor placing to finance the purchase of Tribol.
 The enhanced share alternative proposals, which will be sent to shareholders on September 15, will be the subject of an Extraordinary General Meeting on October 15. The payment date for the interim cash dividend will be earlier than usual, on October 27, 1993.
 The interim report will be dispatched to shareholders together with the enhanced share alternative proposals, and copies will be available to the public on application to the Company Secretary at Burmah Castrol House, Pipers Way, Swindon, Wiltshire, SN3 1RE.
 We have reviewed the interim financial information set out on pages 4 to 7 in respect of the six months ended June 30, 1993, which is the responsibility of, and has been approved by, the Directors.
 Our review consisted principally of obtaining an understanding of the process for the preparation of the interim financial information, applying analytical procedures to the underlying financial data, assessing whether accounting policies have been consistently applied, and making enquiries of the Group's management responsible for financial and accounting matters. A review is substantially less in scope than an audit performed in accordance with Auditing Standards and accordingly we do not express an audit opinion on the interim financial information.
 On the basis of our review:
 -- we are not aware of any material modifications that should
 be made to the interim financial information as presented;
 -- in our opinion the interim financial information has been
 prepared using accounting policies consistent with those
 adopted by the Group in its statutory accounts for the year
 ended December 31, 1992, other than as stated in Note (i) to
 the Summary of Results.
 Ernst & Young
 Chartered Accountants
 September 2, 1993
 Burmah Castrol is offering ordinary shareholders an enhanced share alternative whereby they may elect to receive new ordinary shares with a value 50 percent more than the 1993 interim cash dividend of 16.5p per ordinary share announced today, September 2, 1993.
 The value of the dividend offered to shareholders in the form of new ordinary shares under the enhanced share alternative will be 24.75p per ordinary share. Previously, the value of shares allotted under the company's scrip dividend scheme has been equal to the level of the cash dividend.
 Burmah Castrol intends to use the cash retained to develop further its Lubricants and Chemicals operations internationally.
 To provide shareholders with a choice of an assured cash return independent of movements in Burmah Castrol's share price, Barclays de Zoete Wedd Securities (BZW) will make a separate cash offer to purchase the new ordinary shares arising under the enhanced share alternative at a minimum value free of all commissions and dealing costs, which is at least equivalent to a dividend of 24.255p per ordinary share.
 The comparative values are given below:
 Cash Dividend 16.5p per ordinary share
 Enhanced Share Alternative 24.75p per ordinary share
 BZW Cash Offer (minimum) 24.255p per ordinary share
 The Enhanced Share Alternative will allow shareholders
 to elect to receive new ordinary shares to the value of
 150 pounds for every 100 pounds of cash dividend that they would
 normally receive.
 The enhanced share alternative is conditional upon the appropriate resolution being passed at an Extraordinary General Meeting of the company to be held on October 15, and upon admission of the new ordinary shares to the Official List of the London Stock Exchange. Notice of this meeting together with full details of both the enhanced share alternative and the BZW cash offer, including the appropriate forms, will be sent to shareholders on September 15.
 BZW will pass on to shareholders any improvements in this value net of commission which it is able to obtain on the disposal of the shares offered to them.
 The record date for the 1993 interim dividend will be September 10, 1993 and the Burmah Castrol ordinary shares will be traded ex-dividend from September 6, 1993. It is proposed to pay this interim dividend earlier than in previous years and accordingly payment will be made on October 27, 1993.
 Whilst the resolution to be proposed at the Extraordinary General Meeting would additionally enable the directors to offer an enhanced share alternative in respect of the 1993 final dividend, no decision has been taken as to whether such an offer will be made. There is no present intention to make an enhanced share alternative available thereafter.
 Burmah Castrol is being advised on this proposal by BZW and Cazenove & Co.
 Half year to Half year to Full year to
 June 30, 1993 June 30, 1992 December 31, 1992
 $ US millions $ US millions $ US millions
 Turnover 2,045.4 1,756.1 3,637.9
 Net Income 67.6 56.2 111.9
 Earnings per share 35.9c 30.5c 60.2c
 Earnings per ADR 71.9c 61.0c 120.4c
 Enhanced Share Alternative
 Burmah Castrol's enhanced share alternative to the interim cash dividend (see page 2 of interim announcement) is being made available to US shareholders, subject to certain limitations in the case of shareholders resident in the states of California or Georgia. This offer is also being extended to ADR holders, who will be contacted by the depository, The Bank of New York.
 All the figures in this table are taken from the interim results announcement for 1993, published on September 2, 1993. They are translated at the average exchange rate for the six months January to June 1993 of 1 equals $1.51.
 -0- 9/2/93
 /CONTACT: James Alexander of Burmah Castrol plc, 011-44-71-499-9533, or Stuart Carlisle of Dewe Rogerson Inc., 212-688-6840/

CO: Burmah Castrol plc ST: IN: SU: ERN

TW -- NY057 -- 8448 09/02/93 13:10 EDT
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Date:Sep 2, 1993

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