KARACHI, Jan 19: On Wednesday, Shell Pakistan Limited announced financial results for six months ended December 31, 2004, which was the first by a major company this reporting season.

Next in line are those from Fauji Fertilizer due on January 31; Shell Gas (LPG) on Feb 1 and Engro Chemical on February 8. But the Shell results proved lower than analysts' expectations; the company announcing earning per share (eps) for the half year (July-Dec 2004) amounting to Rs26.14.

Though that marked substantial improvement from eps of Rs16.23 earned in the corresponding period of the previous year, the market was generally expecting the second largest Oil Marketing Company (OMC) to post eps in the range of Rs32 to Rs35.

The market naturally reacted unkindly to the company stock, which plunged by Rs15.10 to close at Rs564.90, from the overnight level of Rs580. Volume though was small at 127,000 shares because of tight holdings, the stock saw considerable volatility trading between the high and low of Rs599 and Rs560.

The Board also approved the payment of an interim dividend for the year ending June 30, 2004 at Rs8 per share, which was in line with analysts' expectations.

In a statement issued along with the half term accounts, the company stated that Shell Pakistan Limited had delivered strong results for the six months to December 2004 by achieving a profit after tax of Rs917 million as compared to Rs569 million, depicting a growth of 61 per cent over the same period last year.

"This increase was achieved with higher volumes and an improved product mix", the company said and observed that the interim dividend at Rs8 per share compared with Rs6.50 per share declared for the same period last year.

The dividend, directors said, had been declared "despite higher demands on the company's cash flow as a result of increased product costs that were not fully recovered".

Analysts commented that most analysts had visualized eps to be fairly higher than reported "thanks to record high global oil prices and double digit growth in POL products' demand".