Mubasher: Royal Dutch Shell on Thursday posted robust results for the third quarter of 2018, marking a four-year high, citing stronger oil and gas prices.
The company achieved $5.624 billion in net income attributable to shareholders and based on a current cost of supplies (CCS) and excluding identified items, up 39% from $4.1 billion in the year-ago period, the British-Dutch firm said in a statement.
Shell’s results came in-line with analyst projections of $5.766 billion in net income.
The company added that its cash generation from operations jumped 60% to $12.1 billion on the back of major cost savings which have been implemented in the past few years and which have filtered through. This figure included “negative working capital movements of $2.6 billion, compared with $7.6 billion in Q3-17 [and] which included negative working capital movements of $1.3 billion,” the statement indicated.
“Good operational delivery across all Shell businesses produced one of our strongest-ever quarters, with cash flow from operations of $14.7 billion, excluding working capital movements,” commented Royal Dutch Shell CEO Ben van Beurden.
He added that Shell’s strong financial performance allowed it “to cover the cash dividend, interest payments, share buybacks and to further pay down debt.”
The profit growth was also attributed to higher oil and gas prices, added to stronger contributions from trading operations. However, it was offset by weaker refining margins as well as tax and currency exchange effects, the oil and gas provider said.
Commenting on Shell’s strategy, van Beurden said it was “on track” and that the firm had completed its first share buyback tranche as it seeks to repurchase $25 billion of its shares by 2020.
On Thursday, van Beurden announced the launch of the second tranche, which will have “a maximum aggregate consideration of $2.5 billion in the period up to and including 28 January 2019.”
Shell’s debt levels, however, remain high, after its debt ratio versus company capitalisation, known as gearing, fell to 23.1% in Q3-18 from 23.6% at the end of June.
Total dividends distributed to shareholders in the quarter amounted to $3.9 billion, Shell added.
“The transformation of our portfolio [has] continued, with further divestments of non-strategic assets and the final investment decision on LNG Canada,” he added.
