ROYAL DUTCH SHELL PLC DOTCOM: Asia Pulse: SHOWA SHELL SEES '06 GROUP PRETAX PROFIT PLUNGING 44 PCT: 17 January, 2006

TOKYO, Jan 17 Asia Pulse - Showa Shell Sekiyu KK (TSE:5002) expects its consolidated pretax profit for 2006 to drop to around 50 billion yen (US$435 million), a decline of 44 per cent from the estimated figure in 2005.

The company posted a strong group pretax profit in 2005 largely because of the sharp rise in crude oil prices, which saw Dubai crude prices shooting up from less than US$31 a barrel in January to nearly US$60 in September, bringing a windfall of roughly 40 billion yen. Because such steep price increases are unlikely to be repeated, group pretax profit is expected to come in lower in 2006.

When fluctuating crude oil prices are disregarded, however, the company's group pretax profit for 2006 will likely remain almost unchanged from a year earlier.

Group sales for 2006 will likely rise by 6 per cent to about 2.4 trillion yen as the company has shifted its business focus to sales expansions from streamlining.

Consolidated net profit is forecast to fall by 43 per cent to about 30 billion yen.

Last year's tie-up with Fuji Oil Co. will likely boost Showa Shell's bottom line by opening a channel to purchase petroleum products. Bringing Toa Oil Co. (TSE:5008) into the consolidated balance sheet is also expected to increase Showa Shell's profits.

But these positive changes will likely be offset by higher transportation costs and other expenditures related to efforts to increase sales, as well as large-scale regular maintenance work scheduled for a refinery in 2006.

(Nikkei)

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