Thursday, January 31, 2008

UK company makes record profit, makes BBC gloomy

So what was the lead item on BBC breakfast news on TV this morning? It was about Royal Dutch Shell making the biggest profit of any UK company in history. Now in Japan, South Korea, Hong Kong, Singapore or even China, this would be something celebrated, an enormous success. However not for the BBC on TV, the manufactured story was “are they ripping us off?”.
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Now the BBC isn’t stupid. It knows that a profit figure of £14 billion means little unless you have the context of the value of the company. After all, if the assets are worth £500 billion, it isn’t great, if the assets are worth £50 billion it is a tidy profit indeed. However the socialist minded British public see profit like a lottery win – not a return on investment. The BBC didn’t disclose the current market capitalisation of Shell. Secondly, it didn’t reveal where the profit goes. This isn’t clear yet, but presumably some will be reinvested capital and much will be dividends to shareholders, many of which are financial institutions with pensions, deposits and other funds that affect the wealth of many people. Keeping vague about this ensures that many think that it just means a few people living the life of Uncle Scrooge or Montgomery Burns, whereas Shell has generated a profit that will benefit plenty.
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There is a bigger question about reserves and whether discoveries and current production can keep up with demand, which is what the Daily Telegraph focused on.
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One thing the BBC did report was where the profit came from – exploration and discovery of new fields, the wholesale market for crude and refined products. It wasn’t retail at the pump, where the margins are closer to 1-2p per litre (noting than in the UK around 70p is tax). This doesn’t stop the leftwing union Unite stating calling it obscene – when what is truly obscene is the extent to which taxes on fuel fund big government at Westminster. Of course Unite doesn’t produce anything itself, it calls for a tax to add to the money that the state takes from oil customers, like far too many socialists Unite worships the fist of the state over the choices of consumers and shareholders.
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So there you go, big British firm makes a hefty profit and it is held in suspicion. The UK wonders why so many people have a poverty of ambition while a culture of envy is cultivated, and the thieving hand of the state is largely ignored.
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Of course given that by owning a TV set in the UK you are legally obliged to pay for the BBC, under threat of fine and criminal prosecution, regardless of whether you watch or listen to any of the BBC's content - I would wonder why the BBC can't answer why it can judge Shell, when its customers don't get forced to buy its products, but the BBC forces people who aren't its customers to pay for all of its products? Presumably TV and radio are more important than energy.

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