Shell profit surges on oil price re­bound

New Straits Times - - Business -

LON­DON: Royal Dutch Shell re­ported a sharp rise in net profit yes­ter­day, beat­ing fore­casts and join­ing its peers as stronger oil prices and im­proved re­fin­ing mar­gins boosted rev­enue af­ter three years of down­turn.

A bil­lion dol­lars in cost sav­ings and bud­get cuts made over the past three years, as well as around US$20 bil­lion (RM86.6 bil­lion) of as­set sales fol­low­ing the US$54 bil­lion ac­qui­si­tion of BG Group in Fe­bru­ary, also helped in­crease cash flow and boost profit.

Af­ter com­plet­ing the in­te­gra­tion of BG Group in the third quar­ter of last year, the com­pany and in­vestors are turn­ing their fo­cus to in­creas­ing rev­enue and re­duc­ing debt as oil prices ap­pear to re­cover.

A near 55 per cent rise in oil prices in the first quar­ter com­pared with a year ear­lier to around US$54 a bar­rel was the main driver of earn­ings growth.

Shell gen­er­ated a cash flow of US$9.5 bil­lion in the quar­ter, up 13-fold from a year ear­lier, en­abling it to cover its div­i­dend and re­duce debt for a third quar­ter in a row.

Oil and gas pro­duc­tion rose 2 per cent in the quar­ter to 3.752 mil­lion bar­rels of oil equiv­a­lent (boed) from 3.905 mil­lion boed in the fourth quar­ter of last year, as a num­ber of new fields con­tin­ued to ramp up pro­duc­tion.

Re­fin­ing and mar­ket­ing earn­ings also rose 20 per cent, to US$2.49 bil­lion.

Shell’s debt ra­tio ver­sus com­pany cap­i­tal­i­sa­tion de­clined in the first quar­ter to 27.2 per cent from 28 per cent in the fourth quar­ter.

Net in­come at­trib­ut­able to share­hold­ers in the quar­ter, based on a cur­rent cost of sup­plies and ex­clud­ing ex­cep­tional items rose 142 per cent to US$3.75 bil­lion, com­pared with an­a­lysts’ con­sen­sus of US$3.05 bil­lion. Reuters

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