Shell’s chemical segment posts 14% increase in Q3 earnings

29 October 2009 09:14  [Source: ICIS news]

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LONDON (ICIS news)--Shell’s chemical segment reported a 14% increase in third-quarter earnings on a current cost of supply (CCS) basis to $169m (€115m) due to improved income from investments, the oil giant said on Thursday.

The increase in chemical earnings came despite lower realised margins for the third quarter, Shell said in a statement.

Chemicals sales volumes fell by 5% to 4,723,000 tonnes compared with the same quarter last year, even though manufacturing plant availability increased to 95%, 9% higher than in the third quarter 2008, which was affected by hurricanes in the US, it added.

The weak global economy continued to have an impact on downstream volumes in the oil products and chemicals segments, the company said.

Shell's group earnings for the quarter on a CCS basis were 72% lower at $3.0bn, with upstream earnings significantly lower at $1.5bn compared with $8.6bn in the third quarter of 2008.

“Our third-quarter results were affected by the weak global economy. Upstream and downstream profitability has been sharply reduced compared to year-ago levels,” said Shell CEO Peter Voser.

“We see some indications that energy demand and pricing are improving, but the outlook remains very uncertain, and we are not expecting a quick recovery,” he added.

Shell will continue to focus on improving its competitive cost position and increasing personal accountabilities, Voser said, adding that the company has reduced operating costs by $1.0bn in the first nine months of 2009 compared with the same period in 2008.

($1 = €0.68)

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By: Lucy Craymer
+44 20 8652 3214

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