ULTRAMAR SAYS FOURTH QUARTER SHOWED IMPROVEMENTS
Ultramar Plc <UMAR.L> said that while
its fourth 1986 quarter had improved from the operational point
of view, several special charges adversely affected results.
    Overall the year had not been a good one, with upstream
operations dramatically hit by the fall in crude oil prices and
downstream operations also affected in the first half by large
losses on inventories.
    But margins improved in the second half and in particular
refining and marketing in Eastern Canada showed a good
recovery.
    The company was commenting on results that showed a net
loss for the year of 62.1 mln stg after a 71.6 mln profit in
1985.
    The fourth quarter charges included a 20.8 mln stg
provision on a retroactive price agreement recently initialled
by Pertamina and Japanese buyers of the company's liquid
natural gas and 4.7 mln for the early months of its ownership
of Gulf Canada's marketing assets.
    Ultramar said it had also included the estimated cost of a
further reorganisation programme, which was partly offset by a
withdrawal of surplus funds from U.S. Pension schemes, and a
13.5 mln stg provision for the estimated cost of selling its
U.S. Flag shipping operation.
    The immediate outlook for crude oil prices was uncertain
although it was unlikely there would be any sizeable increase
in the near term. However, Ultramar said it was optimistic
prices would strengthen over the longer term.
    Its substantial reserves of crude oil and natural gas put
it in a good position to benefit from any price recovery.
    In the meantime, Ultramar's objectives were to improve
profitability by selling or restructuring weak operations while
strengthening core businesses and developing a sound
operational and financial base.
    Proven, probable and possible reserves at end-1986 totalled
about 700 mln barrels net on an oil-equivalent basis.
    Ultramar shares firmed on the announcement to 187p from
181p at last night's close.
 REUTER
