Shell Pakistan swings to profit in 2023

KARACHI: Shell Pakistan Limited (SPL), a subsidiary of Royal Dutch Shell, reported a net profit of Rs6.21 billion in 2023, reversing a loss of Rs82.31 million a year earlier, thanks to a surge in its other income.

The oil marketing company (OMC) didnot announce a final cash dividend for the year ended December 31, 2023. The interim cash dividend for the nine months ended September 30, 2023, was Rs5 per share.

Shell said in a statement to the Pakistan Stock Exchange on Wednesday that its earnings per share (EPS) stood at Rs27.34 in 2023, compared with a loss per share of Rs0.34 in the same period last year.

Net revenue rose nearly 5 percent to Rs431.65 billion, from Rs412.69 billion, while gross profit fell over 8 percent to Rs30.77 billion, from Rs33.59 billion.

The company attributed the decline in gross profit to an increase in the cost of products sold, which rose 6 percent to Rs400.88 billion in 2023, from Rs379.11 billion in 2022.

However, the OMC's other income, which includes interest income, dividend income, exchange gains and other miscellaneous income, soared 666 percent to Rs9.03 billion in 2023, from Rs3.27 billion rupees in 2022.

As a result, Shell Pakistan posted an operating profit of Rs9.03 billion in 2023, compared with an operating loss of Rs3.27 billion in 2022.

The company's finance cost also increased by 84 percent to Rs2.5 billion in 2023, from Rs1.36 billion in 2022, due to the high interest rate during the period.

WAFI Energy LLC, one of the leading fuel station companies in Saudi Arabia, in November announced its intention to acquire up to 77.42 percent shares and control of Shell Pakistan.