Royal Dutch Shell became the latest major oil company to deliver better than expected earnings in recent months as the market recovery begins to gain traction.
The Anglo-Dutch oil giant reported $4.1bn (£3bn) in earnings for the last quarter on a current cost of supply basis, its standard measure of profitability. The sum comes in well above analyst forecasts that the group would make $3.6bn for the latest quarter.
Shell’s quarterly earnings are almost 50pc higher than in the same quarter last year, when they reached $2.8bn.
Ben van Beurden, Shell’s chief executive, said Shell’s growing momentum strengthened his belief that his growth strategy was working.
Shell has undertaken a major overhaul of its business by shifting the balance of its activities from oil towards more production, and from high-cost areas towards projects that can be profitable even at very low oil prices.
Generating cash is a key focus for Shell in order to cover its dividend and pay off the heavy debt pile it amassed following the £36bn takeover of gas giant BG Group last year.
Mr Van Beurden said the group’s oil and gas production business generated almost half of its $10bn cash flow from operations at an average price of $52 a barrel.
Oil prices have edged up towards $60 a barrel in recent weeks, raising expectations for the oil industry’s full-year results.
“Shell’s three businesses all made resilient contributions to this strong set of results,” Mr Van Beurden said. He added that the oil production was complemented by “good cash contributions” from its growing gas business and from ‘downstream’ activities such as fuel and chemicals sales.
By Jillan Ambrose.
Full story at Yahoo News.
No comments:
Post a Comment