Shell Romania Group logged preliminary net profit of $5 million in 2003, as both its local operators, Shell Romania SRL and Shell Gas Romania, ended in the black, an unprecedented result, at least in the last five years, according to its filings with the Finance Ministry. The Anglo-Dutch oil corporation has managed to break even in Romania, even though operating expenses were higher than expected, its officials say.
Shell Romania SRL, which deals in fuel and lubricant distribution, as well as aviation and navy products had been posting annual losses since 1999, as shown in its financial statements.
The other company held by the oil giant in Romania is Shell Gas Romania, which operates on the LPG market and is 45% held by SNP (National Oil Company) Petrom.
"Globally and consolidated, the turnover (of Shell in Romania i.e.) went up towards $220 million, 35% higher than in 2002. This trend is largely due to an increase in the sales volume for various product categories. After two difficult years, 2003 saw significant improvements of most of the financial performance indices for each of our businesses," Joel Maes, Shell's Romanian group president told Ziarul Financiar. The financial results have not been audited yet.
Maes added the total operating expenses had increased in US dollars beyond the level budgeted last year, "mainly because of the large gap between the inflationary rate and the ROL/USD exchange rate, which was unfavourable all through the year."
At the same time, the sales growth volume in its turn contributed to the rise in costs, though the cost unit fell 5% in real terms globally, as Mael adds.
"Shell's Romanian companies and each separate business have focused on three strategic components: differentiating products and services to improve the offer for our clients, operational performance throughout the entire distribution network and active portfolio management," the Shell official says.
Shell's losses on the Romanian market had chiefly been incurred by the gas station network.
To optimise costs, Shell last year shed 23 gas stations that did not meet the group's standards and were sold to MOL Romania, the branch of the Hungarian oil group, in a deal the market estimates at $20-$25 million.
The transfer of the stations will be completed in a matter of weeks, so that the Shell network will slim down to 58 stations. Shell Romania SRL is a medium-sized player on the Romanian fuel distribution market, which sees approximately 2,000 gas stations running.
Petrom, the state-owned oil operator, has about 695 stations. Next in line are Lukoil (Russia) and private Romanian oil group Rompetrol (more than 200 stations each), followed by MOL - 76 stations (23 of which are now being transferred from Shell), OMV - over 50 stations and Agip - 20 stations, with the rest held by private operators.
adrian.mirsanu@zf.ro
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