Shell net profit jumps 54pc to $30.92bn Friday, 03 February 2012 03:48

LONDON:  Energy giant Royal Dutch Shell said yesterday that 2011 net profit jumped 54 percent to $30.92bn on higher oil prices, but also revealed a drop in fourth-quarter earnings.

The profit after tax figure compared with net income of $20.47bn during 2010, Shell said in a results statement. The group was boosted as Brent oil prices averaged $110.91 per barrel last year. However, the Anglo-Dutch firm also revealed that net profits slipped four percent to $6.5bn in the fourth quarter, or three months to the end of December, compared with same part of 2010.

Europe’s largest oil company faltered due to a squeeze on refining margins and lower American natural gas prices, and it cautioned over the “volatile” outlook for the global economy — and the energy market. Total oil and gas output eased five percent to 3.3 million barrels of oil equivalent per day, hit by the temporary shutdown of one of its biggest fields in Nigeria.

Shell is meanwhile set to invest $30bn into new investment projects to boost the company’s growth, and added that its 2012 outlook was boosted by more than 60 new projects and options. “I am pleased with our delivery in 2011, focusing on improving our operating performance and ramping up our growth projects,” said chief executive Peter Voser in the earnings release.

“We have made good progress with portfolio development during 2011, with new opportunities in global gas, liquids-rich shales and exploration, alongside some $7.5bn of divestments as part of Shell’s drive for on-going capital efficiency and portfolio improvement.” Shell said it would raise its dividend by two percent for the first time in three years from next quarter.

AstraZeneca to

axe 7,300 jobs

LONDON: AstraZeneca is cutting a further 7,300 jobs and expects earnings to fall 14-18 percent this year as patents on key drugs expire and governments in Europe and the United States squeeze prices. Britain’s second-biggest drugmaker said that the latest phase of cuts, equivalent to 12 percent of the workforce, would deliver an extra $1.6bn in annual benefits by the end of 2014. It will cost $2.1bn to implement. The Anglo-Swedish drugmaker faces loss of exclusivity on many of its top-selling drugs over the next five years and has few obvious replacements in its pipeline. The antipsychotic medicine Seroquel, its second-biggest drug, will lose exclusivity in the United States in March and also goes off patent in European countries this year. That will contribute to a tough year, with group sales expected to decline by a low double-digit percentage in 2012. As a result, Chief Executive David Brennan has been shrinking the business. The company has already implemented two earlier rounds of cutbacks involving 21,600 job losses since 2007, which has reduced its worldwide headcount to 61,000. The latest reductions include ending research work at Sodertalje, a major facility in Sweden, as well as cutbacks in global sales, manufacturing and other operations.     

Deutsche Bank profits fall

FRANKFURT: Deutsche Bank, Germany’s biggest bank, said yesterday that it failed to meet its profit targets in 2011 as the eurozone debt crisis hit earnings at the year-end. “Overall, 2011 was a good year for Deutsche Bank, although, of course, it was not possible for us to attain our original earnings target,” Josef Ackermann told his last annual earnings news conference in his capacity as chief executive. The 63-year-old Swiss-born manager is stepping down at the end of May after 10 years as one of Germany’s most powerful — and at times most controversial — corporate bosses and will be replaced by the German-Indian duo of Juergen Fitschen and Anshu Jain.  The group incurred a loss of ¤351m  ($462m) at a pre-tax level in the fourth quarter. Revenues in the investment banking fell by 26 percent year-on-year in the October-December period, even if revenues in the classic banking division were up 22 percent, thanks largely to the inclusion of Postbank, acquired in 2010. Loan-loss provisions were increased by a third to ¤540m in the fourth quarter. Nevertheless, looking at 2011 as a whole, Deutsche Bank’s net profit amounted to ¤4.3bn, representing an increase of 87 percent over 2010, and revenues were up at 16 percent at ¤33.2bn.

Hynix swings to red

Seoul: South Korea’s Hynix Semiconductor, the world’s second-largest maker of memory chips, said it swung into the red in the fourth quarter as chip prices fell on weak demand for personal computers. The net loss was 239.9bn won ($213.1m) in October-December compared to a net profit of 30bn won a year earlier, the company said. It was the second consecutive quarterly net loss. Fourth-quarter sales fell 7.2 percent year-on-year to 2.55 trillion won, and the operating loss was 167.5bn won compared to an operating profit of 293.7bn a year earlier. For the whole of last year the company’s net loss was 56bn won, compared with a net profit of 2.6 trillion won the previous year. Sales fell 14.1 percent on-year to 10.4 trillion won and operating profit dropped 89.1 percent to 325.5bn won. The prices of DRAM chips used in personal computers have been dropping since September 2010. Last year’s floods in Thailand, the world’s leading maker of computer drives, also hit global computer markets. Hynix competes with Samsung Electronics in the dynamic random access memory (DRAM) chip market and with Japan’s Toshiba in the NAND flash memory market. Hynix said DRAM prices fell 19 percent in the fourth quarter and prices of NAND dropped 17 percent.

Mazda in loss

TOKYO: Japan’s Mazda Motor reported a third-quarter loss of almost $1bn, as the strength of the yen dented its export-dependent production. Mazda, Japan’s fifth-largest car maker by volume, incurred a net loss of 72.97bn yen ($958m) in the three months to December, much larger than the 2.67bn yen loss reported a year earlier.  At the operating level the company, based in Hiroshima in western Japan, fell into a loss of 32.64bn yen in the quarter, from a profit of 1.05bn yen in the corresponding period. Sales fell from 560.24bn yen to 459.14bn yen.  For the nine months to December, the carmaker posted a net loss of 112.84bn yen, falling into the red from a net profit of 2.85bn yen a year earlier, as it suffered a 17.4 percent decline in sales to 1.42 trillion yen. The automaker also revised down its unit sales forecast by 14 percent in Europe and 1.8 percent in total, citing European financial instability and smaller production volumes due to the floods in Thailand.

Aramex Q4 profit up

DUBAI: Dubai’s Aramex warned of an uncertain outlook for the logistics firm in 2012 due to unrest in the Middle East and worries over the global economy, as it reported a 4 percent rise in quarterly profit. Aramex made a net profit of Dh57.2m ($15.57m) in the fourth quarter, up from Dh55m in the corresponding period in 2010, the company said in a statement to the Dubai bourse. Revenue for the quarter reached Dh682m, up 18 percent from Dh580m in the prior-year period. Profit for the year also increased by 4 percent to Dh211.5m.  Uncertainty remains over the outlook for 2012 in light of sluggish global trade and instability in the Middle East, the company’s chief executive Fadi Ghandour said. In January 2011, Aramex was forced to suspend its operations in Egypt during an uprising that ultimately ended former president Hosni Mubarak’s 30-year rule. In December, the company paid $55.5m from its internal cash balance for the acquisition of South African logistics firm Berco Express.     

Electrolux profit falls

STOCKHOLM: Electrolux, a leading global maker of household appliances, posted a 48-percent plunge in net profit in 2011, as price pressure, high material prices and weak demand hit earnings. “The appliance market in the fourth quarter of 2011 remained very competitive. The headwinds of price pressure, higher raw-material costs and weak demand grew stronger as the year progressed,” chief executive Keith McLoughlin said. He said these factors negatively impacted earnings by 3bn kronor ($445m). Net profit for the full-year came in at 2.06bn kronor, down from 3.99bn a year earlier. For the fourth quarter, net profit fell by 68 percent to 220m kronor, far below the 476m  forecast by analysts surveyed by Dow Jones Newswires. The Swedish company is the the world’s second-biggest maker of household appliances behind US group Whirlpool. For the full-year 2011, sales slipped by 4.4 percent to 101.6bn kronor, but rose by three percent in the fourth quarter to 28.3bn, which was higher than the 27.9bn expected by analysts.

Hitachi profit dives

TOKYO: Japanese high-tech firm Hitachi said its nine-month net profit dived more than 61 percent year-on-year, with its third quarter hit by a strong yen and weaker demand from Europe and China. Hitachi’s net profit came to 85.23bn yen ($1.1bn) in the April-December period, as operating profit fell 21.4 percent from the previous fiscal year to 265.73bn yen. Sales edged up 1.1 percent to 6.84 trillion yen. Earnings for the October-December quarter tumbled by nearly 45 percent as the European debt crisis, weaker Chinese demand and the strong yen hurt Hitachi’s electronics and infrastructure businesses. The company’s products range from microchips to railways. Revenues grew in systems for the automobile and telecom industries. The firm left its earnings forecasts for the full year to March unchanged, expecting net profit to fall 16.3 percent to 200bn yen and operating profit to shrink 10 percent to 400bn yen.

Hyundai Heavy net drops

SEOUL: South Korea’s top shipbuilder Hyundai Heavy Industries said its fourth-quarter net profit dropped 91 percent from a year earlier as it built more low-priced ships and raw material costs rose. Net profit was 71.3bn won ($63.8m) in October-December compared with 827bn won a year earlier, the company said. Sales rose 5.1 percent year-on-year to 6.75 trillion won in the fourth quarter, while operating profit dropped 62.4 percent to 405bn won. For the whole year the company’s net profit fell 31.4 percent compared to 2010 to 1.95 trillion won. Sales rose 11.7 percent to 25.02 trillion won but operating profit fell 27 percent to 2.6 trillion won. Hyundai Heavy won orders worth $25.3bn last year, up 47.2 percent from 2010. It said it is targeting orders worth $30.6bn this year.

Mitsubishi Motors in black

TOKYO: Japan’s Mitsubishi Motors said that cost cuts and a better product line-up enabled to it to reverse a year-before loss and post a net profit in the nine months to December. Mitsubishi, the fourth-largest automaker in Japan, reported a 13.6bn yen ($179m) net profit for the April-December term, turning around a loss of 2.2bn yen in the same period in 2010. Operating profit tripled to 38.5bn yen, said the maker of the i-MiEV, the world’s first commercially produced electric car. “The increase was made possible mainly due to improvements in the model mix, together with other factors such as reductions in materials and other costs,” the company said in a statement. Sales slipped 1.4 percent to 1.29 trillion yen despite rises in Russia, Brazil and other emerging markets. In the October-December quarter alone, net profit fell to 3bn yen from 6.3bn  yen in the preceding quarter.

Munich Re profits fall

FRANKFURT: Munich Re, the world’s biggest reinsurer, said that profits plummeted last year due to heavy losses from both the eurozone debt crisis and a string of natural catastrophes. Munich Re said that it booked bottom-line net profit of ¤710m ($935m) in 2011, a drop of 71 percent from a year earlier. “The year was marked by a series of severe earthquakes and many weather-related catastrophes. In addition, there was the worsening of the sovereign debt crisis in the eurozone,” the statement said. “We have never experienced a year like 2011 before — extreme burdens from natural catastrophes combined with the financial crisis, which flared up again after the slight recovery in 2009 and 2010,” said chief financial officer Joerg Schneider. While gross premiums for the year rose by 8.9 percent to ¤49.6bn, investment earnings dropped 21.8 percent to 6.8bn  euros, not least as a result of 1.2bn euros in writedowns on the group’s holdings of Greek government securities. Munich Re said that losses from natural catastrophes amounted to 4.5bn  euros for the entire year, with the deadly earthquake and ensuing tsunami in Fukushima, Japan, costing it ¤1.5bn at a pre-tax level. Taking the fourth quarter alone, Munich Re’s net profit rose by 33.1 percent to ¤630m.

Unilever stable

THE HAGUE: The Anglo-Dutch food and cosmetics giant Unilever reported essentially unchanged profit figures for 2011, owing to difficult markets and pressure from rising commodity prices. Unilever’s net profit came in at ¤4.25bn ($5.58bn), compared with ¤4.24bn in 2010, a statement said, on sales that gained five percent to ¤46.47bn. The Rotterdam-based group underscored that its results were achieved against a background of difficult markets. It noted that progress had been made to turn Unilever into a “sustainable growth company despite difficult markets and an unusual number of significant external challenges,” but did not go into detail. Unilever posted fourth-quarter sales of ¤11.56bn, up 6.8 percent. Unilever’s personal care and food product arms recorded notable sales increases in South East Asia and in India, the group said. It pointed to strong growth overall in emerging markets, which now account for 53 percent of the group’s total, particularly in Africa and Asia. Latin American divisions saw growth of 10.8 percent while those in western Europe reported a much more modest increase of 0.7 percent. Unilever owns a wide variety of brands including Knorr, Lipton, Dove and Vaseline. It employs 167,000 workers in 100 countries.

JAL flies high

TOKYO: Japan Airlines, which went bankrupt two years ago in one of the country’s biggest-ever corporate failures, reported a nine-month profit of almost $2bn, in part thanks to the strong yen. The carrier was bailed out by the government after filing for bankruptcy with debts of about 2.32 trillion yen, and emerged from a court-supervised restructuring in March last year. JAL said net profit reached 146bn yen ($1.92bn) in the nine months to December after aggressive cost-cutting. It posted an operating profit of 162bn yen on sales totalling 909bn yen in the period. Because of the massive restructuring JAL carried out under government supervision — led by Chairman Kazuo Inamori—the airline does not have comparable data from the previous year. The company upgraded its forecast for the full year to March to a net profit of $2.1bn, partly due to a stronger yen that encourages more Japanese to travel overseas. For the year to March 2012, JAL now expects a net profit of 160bn yen and operating profit of 180bn yen on sales of 1.19 trillion yen.

Agencies

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