KPC Says Profits Climb In 9 Months Ending 31 March, 2001

VOL. XLV

No 27

8-July-2002

KUWAIT

KPC Says Profits Climb In 9 Months Ending 31 March, 2001

Kuwait Petroleum Corporation (KPC) said in its latest annual report that its net profits climbed to KD905.6mn ($2,999mn) in the nine months ending on 31 March 2001, compared to KD784.1mn ($2,596mn) in the 12-month period ending 30 June 2000. The annual report covers the nine month period as a result of the change to Kuwait’s fiscal year, which now ends on 31 March. KPC said that profits jumped as a result of the increase in prices for world crude oil, oil products and gas, the company’s ability to keep its costs down and its concentration on strategic markets. Of the KD905.6mn profit, KD311.6mn ($1,031mn) was from trading and operations and the rest was from other net revenues, including KD203.3mn ($673mn) from sale of shares of Santa Fe International Corporation (SFIC), from unconsolidated subsidiaries, investment income and financing cost recoveries.

KPC’s revenues for the nine months ending 31 March 2001 were KD6,489.3mn ($21,488mn), compared to 7,517.8mn ($24,893mn) in the 12 months ending 30 June 2000. Total revenues for the nine months were KD6,998.3 ($23,173mn) which includes KD498.6mn ($1,651mn) classified as other net revenues and KD 116.3mn ($385mn) as extraordinary revenues coming both from insurance recovered against the Mina al-Ahmadi refinery accident and UNCC compensation. Interest income for the nine months fell to KD53.8mn ($178mn) from KD60.3mn ($201mn).

KPC noted that during the fiscal year ended 31 March 2001 it was able to finance its capital projects program and distributed KD815mn ($2,699mn) to the state. Investment in fixed assets over the nine months was KD254mn ($841mn). Total assets were KD11,434.8mn ($37,864mn) compared to KD8,894.4mn ($29,452mn) in the 12 months ending 30 June 2000 and current liabilities were KD2,383.8mn ($7,893mn) compared to KD2,008.3mn ($6,650mn). General and administration expenses fell to KD102.9mn ($341mn) from KD126.4mn ($418mn), provision for inventory and doubtful debts fell to KD5.9mm ($19.7mn) from KD33.4mn ($111mn) and depreciation and amortization was also down at KD119.2mn ($395mn), compared to KD199.8mn ($662mn).

In the annual report, KPC noted that Equate Petrochemicals, of which it owns 45% through PIC, achieved record profits of about $180mn. KPC’s fully-owned upstream subsidiary Kuwait Foreign Petroleum Exploration Company (KUFPEC), which has exploration and production operations in Australia, China, Indonesia, Pakistan, Tunisia and Yemen, increased production and generated record profits of $105mn.

During the nine-month period, KPC continued to divest non-core assets and sold the fully-owned Bahrain-based Gulf Industrial Investment Company for $183mn and offloaded 31mn shares held in SFIC. In order to further improve earnings, KPC said that it is working to implement group insurance, improving storage systems and studying taxation incurred by KPC and its subsidiary companies.