Royal Dutch Shell’s Q3 earn­ing grows to $12.1bn, high­est in four years

Business a.m. - - NEWS - Nse An­thony-Uko with wire re­port

OIL MA­JOR ROYAL DUTCH SHELL, has re­vealed its third quar­ter prof­its, which soared to their high­est in four years.

The in­crease was boosted by ris­ing crude prices as the com­pany pushed ahead with one of the world’s largest share buy­back pro­grammes.

The world’s se­cond-largest listed oil and gas com­pany saw its cash gen­er­a­tion from op­er­a­tions rise by nearly 60 per cent to $12.1 bil­lion, as deep cost sav­ings in re­cent years fil­tered through.

“Good op­er­a­tional de­liv­ery across all Shell busi­nesses pro­duced one of our strong­est-ever quar­ters,” Ben van Beur­den, chief ex­ec­u­tive said in a state­ment.

Net in­come at­trib­ut­able to share­hold­ers in the quar­ter, based on a cur­rent cost of sup­plies (CCS) and ex­clud­ing iden­ti­fied items rose 39 per cent to $5.624 bil­lion from a year ago. That com­pared with a com­pany-pro­vided an­a­lysts’ con­sen­sus of $5.766 bil­lion. It was $4.691 bil­lion in the se­cond quar­ter.

The prof­its ben­e­fited from stronger oil and gas prices as well as big­ger con­tri­bu­tions from trad­ing op­er­a­tions but was off­set by weaker re­fin­ing mar­gins, tax and cur­rency ex­change ef­fects.

Shell launched a $25 bil­lion share buy­back pro­gramme in July, mak­ing good on a prom­ise to boost share­holder re­turns fol­low­ing the 2016 ac­qui­si­tion of BG Group,in a show of con­fi­dence in its fu­ture cash gen­er­a­tion and profit growth out­look.

Shell said it com­pleted the first tranche of buy­backs in Oc­to­ber for $2 bil­lion and was launch­ing a se­cond tranche on Thurs­day of up to $2.5 bil­lion by Jan­uary 28.

Shell’s shares came un­der pres­sure in re­cent months after three dis­ap­point­ing quar­terly re­sults that raised con­cerns over its abil­ity to meet the $25 bil­lion share buy­back tar­get on top of $15 annual div­i­dend pay­out, the world’s big­gest.

Debt lev­els re­mained stub­bornly high. Shell’s debt ra­tio ver­sus com­pany cap­i­tal­i­sa­tion, known as gear­ing, de­clined to 23.1 per cent in the quar­ter from 23.6 per cent at the end of June.

Oil and gas pro­duc­tion in the quar­ter de­clined 2 per cent from a year ear­lier to 3.596 mil­lion bar­rels of oil equiv­a­lent.

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