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Company No.
 3926       U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim report...
Company No.
 3926           U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim re...
Company No.
 3926           U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim re...
Company No.
 3926       U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim report...
Company No.
 3926           U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim re...
Company No.
   3926         U

 SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
 (Incorporated in Malaysia)

 Interim...
Company No.
 3926           U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim re...
Company No.
 3926           U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim re...
Company No.
 3926           U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim re...
Company No.
  3926         U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim rep...
Company No.
 3926       U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim report...
Company No.
 3926        U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim repor...
Company No.
  3926        U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim repo...
Company No.
 3926       U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim report...
Company No.
 3926        U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim repor...
Company No.
 3926        U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim repor...
Company No.
 3926       U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim report...
Company No.
 3926       U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim report...
Company No.
 3926       U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim report...
Company No.
 3926       U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim report...
Company No.
 3926       U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim report...
Company No.
 3926       U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim report...
Company No.
 3926       U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim report...
Company No.
 3926       U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim report...
Company No.
 3926       U

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD
(Incorporated in Malaysia)

Interim report...
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Condensed Income Statements

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Condensed Income Statements

  1. 1. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Following the Shell Refining Company (Federation Of Malaya) Berhad (“the Company”) Board of Directors’ Meeting on 22 November 2004, the Company is pleased to announce its financial results for the three months ended 30 September 2004. This interim report is prepared in accordance with MASB 26 “Interim Financial Reporting” and paragraph 9.22 of the Bursa Malaysia Securities Berhad (“BMSB”) Listing Requirements, and should be read in conjunction with the Company’s financial statements for the year ended 31 December 2003. Page 1 of 25
  2. 2. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Condensed Income Statements Unaudited Individual Quarter Cumulative Quarters 3 months ended 9 months ended Note 30.09.2004 30.09.2003 30.09.2004 30.09.2003 RM’000 RM’000 RM’000 RM’000 Sales 2,020,274 1,350,465 5,324,889 4,049,222 Expenses excluding finance cost and tax (1,814,867) (1,253,292) (4,788,163) (3,908,287) Other operating income 3,234 3,256 9,558 10,482 Profit from operations 208,641 100,430 546,284 151,417 Finance cost (3,183) (3,519) (8,651) (11,620) Profit from ordinary activities before tax 205,458 96,911 537,633 139,797 Taxation 5 (20,633) (10,622) (55,049) (16,468) Profit from ordinary activities after tax 184,825 86,289 482,584 123,329 Minority interest - - - - Net profit for the period Individual184,825 Quarter 86,289 482,584 Cumulative Quarters 123,329 3 months ended 6 months ended Note 30.06.2004 10.04% 30.06.2003 30.06.2004 10.96% 30.06.2003 10.24% 11.78% Estimated average annual effective tax rate RM’000 RM’000 RM’000 RM’000 Sales 1,777,150 sen 1,264,350 sen 3,304,616 sen 2,698,757 sen Earning per share: (1,583,542) (2,975,011) Expenses excluding finance cost and tax (1,309,762) (2,655,289) - basic 6 61.61 28.76 160.86 41.11 -Other operating income diluted 6 3,155 N/A 2,981 N/A 6,324 N/A 7,226 N/A Profit from operations 196,763 (42,431) 335,929 50,694 Finance cost (1,742) (3,585) (3,753) (7,803) Profit from ordinary activities before tax 195,021 (46,016) 332,176 42,891 Taxation 5 (19,724) 1,043 (34,417) (5,846) Profit from ordinary activities after tax 175,297 (44,973) 297,759 37,045 Minority interest - - - - Net profit for the period 175,297 (44,973) 297,759 37,045 Estimated average annual effective tax rate 10.11% 2.27% 10.36% 13.63% sen sen sen sen Earning per share: Page 2 of 25 - basic 6 58.43 -14.99 99.25 12.35 - diluted 6 N/A N/A N/A N/A
  3. 3. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 The notes set out on pages 6 to 12 form an integral part of, and should be read in conjunction with this interim financial report. Page 3 of 25
  4. 4. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Condensed Balance Sheet Unaudited As at As at Note 30.09.2004 31.12.2003 RM'000 RM'000 Non-current assets Property, plant and equipment 7 1,343,375 1,410,657 Investment properties - - Intangible assets - - Other non-current assets - - 1,343,375 1,410,657 Current assets Inventories 768,096 384,567 Receivables, deposits and prepayments 1,009,491 657,508 Marketable securities - - Deposits, bank and cash balances 2,159 11,229 1,779,746 1,053,304 Less: Current liabilities Provisions - - Payables (801,503) (533,188) Tax Liabilities (29,320) (1,383) Short term borrowings 10 - - Current portion of long term debt 10 (91,200) (91,200) Dividends payable (21,600) - (943,623) (625,771) Net current assets 2,179,498 1,838,190 Less: Non current liabilities Deferred tax liabilities 273,078 259,556 Provisions - - Long term borrowings 10 509,200 577,600 782,278 837,156 1,397,220 1,001,034 Capital and reserves Share capital 11 300,000 300,000 Revaluation reserve 15,738 15,738 Retained profit 1,081,482 685,296 Shareholders' equity 1,397,220 1,001,034 Page 4 of 25
  5. 5. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 The notes set out on pages 6 to 12 form an integral part of, and should be read in conjunction with this interim financial report. Page 5 of 25
  6. 6. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Condensed Statement of Changes in Equity Unaudited Non-distributable Distributable Revaluation Share Share and other Retained capital premium reserves earnings Total RM'000 RM'000 RM'000 RM'000 RM'000 Balance as at 1 January 2004 300,000 - 15,738 685,298 1,001,036 Net profit for the 9-months period - - - 482,584 482,584 Dividend for the period ended: - 31 December 2003 (final) - - - (43,200) (43,200) - 31 March 2004 (special interim) - - - (21,600) (21,600) - 30 June 2004 ( interim ) - - - (21,600) (21,600) - 30 Sept 2004 (interim) - - - - - Balance as at 30 September 2004 300,000 0 15,738 1,081,482 1,397,220 Balance as at 1 January 2003 300,000 0 18,650 546,218 864,868 Net profit for the 9-months period - - - 123,329 123,329 Dividend for the year ended: - 31 December 2002 (final) - - - (32,400) (32,400) - 30 September 2003 (interim) - - - - - Balance as at 30 September 2003 300,000 0 18,650 637,147 955,797 Page 6 of 25
  7. 7. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 The notes set out on pages 6 to 12 form an integral part of, and should be read in conjunction with this interim financial report. Page 7 of 25
  8. 8. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Condensed Cash Flow Statement Unaudited 9 months ended Note 30.09.2004 30.09.2003 RM'000 RM'000 Cash flows from operating activities Profit/(Loss) after taxation 482,584 123,329 Adjustment for: Depreciation 78,234 80,441 (Profit)/Loss from disposal of property, plant and equipment (65) - Taxation 55,049 16,468 Exchange (gains)/losses on foreign currency translation (960) 478 Interest income (3,084) (532) Interest expense 8,651 11,620 620,410 231,804 Changes in working capital (Increase)/decrease in inventories (359,544) (38,367) (Increase)/decrease in trade and other debtors (31,359) 7,292 Increase/(decrease) in trade and other creditors 306,367 48,040 Net (increase)/decrease in amount due from related companies (381,266) (66,248) Cash generated from operations 154,608 182,520 Interest received 3,084 532 Interest paid (8,651) (11,620) Taxation paid (13,959) (908) Net cash generated from operating activities 135,082 170,524 Cash flows from investing activities Purchase of property, plant and equipment (11,017) (7,436) Proceeds from disposal of property, plant and equipment 65 - Distri- Net cash used in investing activities Non-distributable (10,952) butable (7,436) Revaluation Cash flow from financing activities Share Share and other Retained Note capital premium reserves earnings Total Repayment of long term borrowings RM'000 RM'000 RM'000 (68,400) RM'000 (68,400) RM'000 Repayment of short term borrowings - (8,948) Dividends paid (64,800) (32,400) Net cash (usedDecember 2002 from financing activities Balance as at 31 in)/generated 300,000 - 18,651 (133,200) 546,214 (109,748) 864,865 - change in accounting policy 25 - - (2,913) - (2,913) As restated 300,000 - 15,738 546,214 861,952 Net increase/(decrease) in cash and cash equivalent (9,070) 53,340 Net profit for the 12-month period - - - 182,284 182,284 Cash and cash equivalent at the beginning of the year 11,229 - Cash and the2002equivalent at the end of the year Dividend for year ended: cash (final) - - - 2,159 (32,400) 53,340 (32,400) - 31 December - 30 June 2003 (interim) - - - (10,800) (10,800) Balance as at 31 December 2003 300,000 - 15,738 685,298 1,001,036 Balance as at 31 December 2003 300,000 - 15,738 685,298 1,001,036 Net profit for the 6-month period - - - 297,759 297,759 Dividend for the year ended: - 31 December 2003 (final) - - - (43,200) (43,200) - 31 December 2003 (special interim) - - - (21,600) (21,600) - 30 June 2004 (interim) Page 8 of 25 - - - - - Balance as at 30 June 2004 300,000 0 15,738 918,257 1,233,995
  9. 9. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 The notes set out on pages 6 to 12 form an integral part of, and should be read in conjunction with this interim financial report. Page 9 of 25
  10. 10. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 6 months ended Note 30.06.2004 30.06.2003 RM'000 RM'000 Cash flows from operating activities Profit/(Loss) after taxation 297,759 37,045 Adjustment for: Depreciation 52,506 54,573 (Profit)/Loss from disposal of property, plant and equipment (65) - Taxation 34,417 5,846 Exchange (gains)/losses on foreign currency translation (863) 408 Interest income (1,715) (298) Interest expense 5,468 8,101 387,507 105,676 Changes in working capital (Increase)/decrease in inventories (156,142) 18,882 (Increase)/decrease in trade and other debtors 33,673 50,237 Increase/(decrease) in trade and other creditors 162,783 (288,074) Net (increase)/decrease in amount due from related companies (318,393) 159,167 Cash generated from operations 109,428 45,888 Interest received 1,715 298 Interest paid (5,468) (8,101) Taxation paid - - Net cash generated from operating activities 105,675 38,084 Cash flows from investing activities Purchase of property, plant and equipment (3,437) (4,499) Proceeds from disposal of property, plant and equipment - - Net cash used in investing activities (3,437) (4,499) Cash flow from financing activities Repayment of long term borrowings (45,600) (45,600) Repayment of short term borrowings - 45,530 Dividends paid (64,800) (32,400) Net cash (used in)/generated from financing activities (110,400) (32,470) Net increase in cash and cash equivalent (8,162) 1,116 Cash and cash equivalent at the beginning of the year 11,229 - Cash and cash equivalent at the end of the year 3,067 1,116 Page 10 of 25
  11. 11. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Notes to the Financial Information 1 Basis of preparation This interim report is prepared in accordance with MASB 26 “Interim Financial Reporting” and paragraph 9.22 of the BMSB Listing Requirements, and should be read in conjunction with the Company’s financial statements for the year ended 31 December 2003. The accounting policies and presentation adopted for the interim financial report are consistent with those adopted for the annual financial statements for the year ended 31 December 2003. 2 Audit report The audit report of the Company’s preceding annual financial statement was not subjected to any qualification. 3 Comments about Seasonal or Cyclical Factors The Company’s operation is not affected by any seasonal or cyclical factors. 4 Individually significant items The Company has nothing to disclose as regards significant items in the quarterly financial statements under review. 5 Changes in Estimates There were no changes in estimates that have had a material effect in the current quarter. 6 Debt and equity securities The Company has nothing to disclose with respect to issuance and repayment of debt and equity securities, share buy-backs, share cancellations, shares held as treasury shares and resale of treasury shares for the current financial period to date Page 1 of 25 1
  12. 12. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Notes to the Financial Information 7 Dividends paid 9 months ended 9 months ended 30 September 2004 30 September 2003 Gross Amount of Gross Amount of dividend dividend net dividend dividend net per share of 28% tax per share of 28% tax Sen RM ‘000 Sen RM ‘000 Final dividend approved by shareholders in respect of the year ended 31 December 2003, paid on 3 June 2004 (2002: paid on 20 June 2003) 20 43,200 15 32,400 Special interim dividend in respect of the quarter ended 31 March 2004, paid on 3 June 2004 (2003: nil) 10 21,600 - - Interim dividend in respect of the financial year 31 December 2004, payable on 8 October 2004 (2003: paid on 15 October 10 21,600 5 10,800 2003) 8 Segmental Reporting The Company is principally engaged in the oil and gas industry namely refining and manufacturing of petroleum products. Accordingly, no segmental information is considered necessary for analysis by industry segments. 9 Carrying amount of re-valued assets The Company has nothing to disclose as regards valuations of property, plant and equipment in the quarterly financial statements under review. 10 Significant post balance sheet event The Company has nothing to disclose as regards significant post balance sheet events in the quarterly financial statements under review. Page 2 of 25 2
  13. 13. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Notes to the Financial Information 11 Changes in Composition of the Company All the results of the Company are based upon existing continuing operations. There is no change in the composition of the Company during the interim period, including business combination, acquisition or disposal of subsidiaries and long-term investments, restructurings and discontinuing operations. There is also no unusual transaction effecting assets, liabilities, equity, net income and cash flow. 12 Contingent Liabilities The Company has guaranteed third party loans to its employees amounting to RM80,400 (2003: RM80,400). These guarantees are not secured against any of the Company’s assets. Arising from the transfer of assets from the (Shell Malaysia Retirement Benefit Fund) SMRBF to the SMPF on 1 May 1997, the Company has provided guarantees to members in relation to: (i) the capital sum transferred; (ii) a minimum return of 2.5% per annum on that capital sum; and (iii) death in service benefits. No provision has been made for the above as the outcome of the liabilities as regards (i) and (ii) above are dependent on the investment performance of those balances whilst item (iii) above is dependent on individual circumstances. The Company, as a Member Company of the SMPF, has confirmed its support of the resolution of the Founding Company that the SMPF has come to an end on 31 December 2003 and that members' balances have been transferred to the Employees’ Provident Fund. The Directors are of the view that the eventual outcome of the liabilities, if any, will not have a material adverse impact on the financial position of the Company. There is no pending material litigation against the Company at the date of this report. The company is a member of two oil spill funds, namely the Contract Regarding a Supplement to Tanker Liability for Oil Pollution (CRISTAL) Fund and the International Oil Pollution Compensation (IOPC) 1971 Fund. The purpose of the Funds is to help compensate parties that have suffered financial losses as a result of oil spill from tankers. The members make contributions to the Funds depending on specific oil spill incidents globally which give rise to payments of compensation by the Funds. As of the date of this report, there are no material claims outstanding. Page 3 of 25 3
  14. 14. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Page 4 of 25 4
  15. 15. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Notes to the Financial Information 13 Tax Taxation for the quarter ending 30 September 2004 amounting to RM 20,633,000 comprises: 3 months ended 9 months ended 30.09.2004 30.09.2003 30.09.2004 30.09.2003 (RM’000) (RM’000) (RM’000) (RM’000) Income tax for current period (15,796) (8,696) (41,526) (12,305) Transfer from deferred tax (4,837) (1925) (13,523) (4,162) (20,633) (10,621) (55,049) (16,467) The difference between the statutory tax rate and the effective tax rate is mainly due to the depreciation expense of non-qualifying assets and taxation exempt income under pioneer status. The amount of unutilised reinvestment allowance as at 30 September 2004 arising from the Company’s pioneer status is RM 264 million. 14 Unquoted investments and/or properties The Company has nothing to disclose with respect to sale of investments and/or properties (other than fixed assets in the normal course of business) in the quarterly financial statements under review. 15 Quoted Securities There were no purchases or disposal of quoted securities during the current quarter. 16 Corporate proposal The Company does not have anything to report as regards the status of corporate proposals. 17 Financial instruments The Company does not have any financial instruments to disclose. Page 5 of 25 5
  16. 16. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Notes to the Financial Information 18 Bank borrowings Details of the Company’s bank borrowings as at end of the period are as follows: RM’000 Short term borrowings (unsecured) - Current portion of term loan (unsecured) 91,200 Term loan (unsecured) less current portion 509,200 USD’000 RM’000 equivalent Bank borrowings denominated in foreign currency- USD 158,000 600,400 19 Earnings per share 3 months ended 9 months ended 30.09.2004 30.09.2003 30.09.2004 30.09.2003 (a) Basic earnings per share Net profit for the period (RM’000) 184,825 86,289 482,584 123,329 Weighted average number of ordinary shares in issue (‘000) 300,000 300,000 300,000 300,000 Basic earnings per share (sen) 61.61 28.76 160.86 41.11 (b) Diluted earnings per share (sen) N/A N/A N/A N/A 20 Capital commitments Capital commitments not provided for in the financial statements as at 30 September 2004 are as follows: RM’000 Authorised by the Directors and contracted 1,693 Authorised by the Directors and not contracted 20,183 21,876 Analysed as follows: - Property, plant and equipment 21,876 Page 6 of 25 6
  17. 17. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Notes to the Financial Information 21 Profit Before Taxation The quarterly profit before taxation is higher compared to the same quarter of the previous year. The Company recorded profits before tax of RM 205 million for the third quarter of 2004 compared to RM 97 million in the third quarter of 2003 (also see accompanying Management Commentary). 22 Company Performance A review of the Company’s performance in the reporting period is provided for in the accompanying Management Commentary. 23 Current Year Prospect A commentary on the Company’s current year prospects is provided for in the accompanying Management Commentary. 24 Change in Accounting Policy In 2003, the Company changed its accounting policy to comply with MASB 25 Income Taxes. In previous years, deferred tax was recognised for timing differences except when there was reasonable evidence that such timing differences would not reverse in the foreseeable future. The tax effect of timing differences that resulted in a debit balance or a debit to the deferred tax balance was not carried forward unless there was a reasonable expectation of its realisation. The potential tax saving relating to a tax loss carry forward was only recognised if there was assurance beyond any reasonable doubt that future taxable income would be sufficient for the benefit of the loss to be realised. Where there was intention to dispose of re-valued assets, the deferred tax relating to such assets was recognised through a transfer from the related revaluation surplus. There was no provision or disclosure made of this tax effect where the Company intended to hold such assets for the foreseeable future. The Company has now changed its accounting policy to recognise deferred tax on temporary differences arising between the amounts attributable to assets and liabilities for tax purposes and their carrying values in financial statements. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which deductible temporary differences or unused tax losses can be utilised. Page 7 of 25 7
  18. 18. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Page 8 of 25 8
  19. 19. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Management Commentary DIVIDEND • Special interim dividend to be paid Directly linked to the Company’s strong third quarter 2004 cash generation, the Directors have declared a special interim dividend of Ten Sen (RM 0.10) gross per unit of share of RM 1.00 each, less 28% Malaysian Income Tax in respect of the third quarter of the financial year ending 31 December 2004, payable on 24 December 2004 to the shareholders registered in the Record of Members at the close of business on 17 December 2004. This is the second such special in- terim dividend declared in respect of financial year 2004 in addition to the interim dividend de- clared in conjunction with the announcement of the second quarter results. COMPANY PERFORMANCE • Highest ever quarterly income after tax of RM 185 million The Company posted a record after-tax net income of RM 185 million for the third quarter of 2004. This is an unprecedented achievement for the Company surpassing the record profits of the first and second quarters. This achievement also represents a significant increase in profits when compared to the net profit after tax of RM 86 million recorded in the same quarter last year. The excellent financial result for the quarter was mainly due to a combination of continued strong refining margins, excellent operational performance and stockholding gains (due to high crude and product prices). The refinery processed 10.72 million barrels of crude oil and feedstock and sold 10.95 million barrels of products during the quarter. • Sustained Zero Lost Time Injury performance The Company was able to sustain zero Lost Time Injury (LTI) up to 30 September 2004, result- ing in 3.35 million man-hours without any LTI since 22nd May 2001. CURRENT YEAR PROSPECTS •Strong refining margins expected to hold in the short term •Continuous efforts to achieve operational excellence It is expected that the current strong refining margin situation will continue to hold in the near term. However, any weakening in oil prices during this period may have a negative impact on the Company’s financial results, given the First-In First-Out (FIFO) accounting practice adopted by the Company. The Company's drive to pursue operational excellence and proactive cost and margin management, in addition to maintaining strong Health, Safety and Environment performance, will continue. Page 9 of 25 9
  20. 20. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Page 10 of 25 10
  21. 21. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Page 11 of 25 11
  22. 22. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Page 12 of 25 12
  23. 23. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Page 13 of 25 13
  24. 24. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Page 14 of 25 14
  25. 25. Company No. 3926 U SHELL REFINING COMPANY (FEDERATION OF MALAYA) BERHAD (Incorporated in Malaysia) Interim report for the three months ended 30 September 2004 Page 15 of 25 15

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