30 July 2009 07:54 [Source: ICIS news]
LONDON (ICIS news)--Shell's chemicals segment reported a smaller loss of $18m (€13m) for the second quarter compared with a loss of $142m for the similar quarter of 2008 as lower sales volumes and margins were partly offset by lower operating costs, the oil giant said on Thursday.
Higher income from equity-accounted investments also helped trim down the second-quarter losses of this division.
The results, reported on a current cost of supply (CCS) basis, included a charge of $67m in the latest quarter compared to a charge of $206m in the second quarter of 2008, Shell said.
Sales volumes decreased by 17% compared to the second quarter 2008, mainly as a result of reduced global demand.
On a non-CCS basis, Shell's chemicals segment posted earnings of $103m in the second quarter, compared to earnings of $157m for the same period of last year.
Shell said its chemicals manufacturing plant availability was 88%, 7 percentage points lower than in the second quarter of 2008.
“The reduced global demand for chemical products significantly impacted the chemicals manufacturing plant utilisation rate, which dropped to 68% from 84% in the second quarter 2008,” it said in a statement.
Shell's group earnings for the quarter on a CCS basis were 70% lower at $2.3bn, with exploration and production earnings significantly lower at $1.3bn from $5.9bn in the second quarter of 2008.
“Our second quarter results were affected by the weak global economy," said CEO Peter Voser.
“This weakness is creating a difficult environment both in upstream and downstream [segments]. Energy demand is weak. There is excess capacity in the market, and industry costs remain high.
Conditions are likely to remain challenging for some time, and we are not banking on a quick recovery,” Voser said.
($1 = €0.71)
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