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European producers announce financial results for Q2

  • 04/08/2016 (10:27)
Major European oil and petrochemical producers have announced their financial results for the second quarter of this year. Lower crude oil prices and weak refining margins dragged down the companies’ profits during the quarter while some major petrochemical producers reported stronger results in the April-June period in some cases unlike their Saudi rivals.

Total’s net profit fell around 30% year over year to $2.09 billion while the company’s revenue declined 17% to $37.22 billion during the same period. The decrease was driven by lower refining and petrochemical revenue as well as weak crude oil markets.

Shell extended its losses to the second quarter. The company’s adjusted net income plunged 72% year over year to $1.05 billion in the second quarter while its losses from oil and gas production rose to $1.3 billion from $469 million a year earlier. Shell reported that lower energy prices, weaker refining margins and production halts weighed on the company’s financial results in the April-June period.

BP also reported that its profit for the quarter declined around 45% to $720 million compared with $1.3 billion in the same period of 2015, missing analysts’ expectations which called for an $840 million profit. The company’s weaker financial results stemmed from weak refining margins, low oil prices as well as lower downstream earnings. BP reported that its refining margins in the second quarter were the weakest for a second quarter since 2010.

Chevron posted the largest quarterly loss seen since 2011 in the second quarter due to lower crude oil prices and weak refining income. In the April-June period, Chevron posted a loss of $1.47 billion compared with profit of $571 million a year earlier.

When looking at major petrochemical producers, meanwhile, the results are showing an opposite path. Some major petrochemical producers reported stronger financial results for the three months ending in June.

Trinseo reported record net income in the April-June period on the back of higher profitability driven by good results in the Performance Materials division as well as in the Basic Plastics & Feedstocks division. The company’s net income rose to $96 million in the second quarter from $77 million in the first quarter. Trinseo’s EBITDA for the quarter also rose to a record high of $168 million from $141 million in the first three months.

Solvay’s net income for the same period rose to €185 million ($203.1 million) compared with €138 million in the same period of 2015. The company’s underlying EBITDA for the quarter was €652 million ($724 million), up 8% from a year earlier.

The company’s revenue from the performance chemicals segment moved higher by 20% from a year earlier to €224 million ($248.8 million) owing to strong volumes in soda ash and continued recovery in acetate tow while the company’s revenue from the functional polymers segment also rose to €64 million ($71 million), up 24% on the year on the back of a higher contribution from RusVinyl.

Spain’s Repsol is another European producer who posted stronger financial results for the second quarter. The company’s net profit rose by 10.2% to €345 million ($381.88 million) in the April-June period from €312 million in the same period of 2015. The company’s stronger financial results were attributed to lower upstream spending and higher production which offset weaker refining margins and maintenance shutdowns at its two major refineries.

Unipetrol also reported that its net profit rose 4% to 3.1 billion crowns ($126.61 million) in the second quarter in the face of insurance payments stemming from an explosion at its steam cracker unit last year. However, the company’s revenue fell 37% on a yearly basis to 20.6 billion crowns ($839.5 million) because of decreasing petrochemical sales stemming from limited production and lower crude oil prices.
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