BG Group Reports Excellent Progress on Current Objectives

BG Group PLC said it has made excellent progress on its objectives for the current year, providing the platform for growth in 2003 and beyond, as it reported in-line second-quarter results.

For the three months to June 30, the oil and gas group reported clean net income of £127 million against 112 million a year earlier, but the one-off charge from the increase in North Sea oil taxes of £51 million weighed on the group's results and net income after the increase was £55 million. In the first half of the year, net income slipped to £188 million, or 260 million before the tax increase, from £248 million. Operating profit before exceptionals in the quarter rose 5% to £216 million from £205 million, while for the first half the figure was almost flat at £436 million against 437 million. The group posted second-quarter EPS of 1.6 pence against 3.2, while the interim dividend rose to 1.55 pence from 1.5 pence.

The company said strong growth in Exploration and Production and at Comgas had been offset by lower upstream prices and the effects of the Argentine economic situation on MetroGAS. At constant upstream prices, operating profit increased by 28 percent for the quarter. Exploration and Production volumes grew by 37 percent for the quarter to 34.6 million barrels of oil equivalent and turnover increased 9 percent to 695 million stg from 636 million stg.

BG said capital expenditure in the six months totaled 889 million stg and the money was spent mainly in India, Kazakhstan, the UK and the Mediterranean Basin. A total of 50 million stg was spent on the group's assets in Trinidad and Tobago. Cash flow from normal operating activities at the group slipped to 440 million stg from 458 million in 2001, while net debt was 945 million and gearing increased to 22 percent at June 30 from 13.2 percent at the beginning of January.