Shell Adjusted Net Profit Soars 88%
Royal Dutch Shell announced Thursday that net profits rose seven percent to 3.463 billion dollars in the third quarter from one year ago, driven by higher output, rising oil prices and lower costs.
However the net profit figure, equivalent to 2.503 billion euros, also included a massive 1.442 billion dollars of impairments and writedowns on the value of assets, Shell said in a results statement.
Adjusted net profit, stripping out exceptional items and changes to the value of oil inventories, rocketed 88.4 percent to 4.933 billion dollars in the three months to September. That beat expectations for profit of 4.32 billion.
Production rose five percent over the period to 3.058 million barrels of oil equivalent per day, compared with the same part of last year.
"Our results have rebounded substantially from year-ago levels, driven by some improvement in industry conditions, and Shell's strategy," said chief executive Peter Voser said in the earnings release.
"We are seeing new growth, with improved earnings and cash flow, underpinned by a 5.0-percent increase in oil and gas production, a 22-percent increase in LNG (liquefied natural gas) sales and increased downstream volumes."
"This is a better performance from Shell, achieved despite continued difficult industry conditions in refining and natural gas markets."
In reaction to the results, Shell's 'A' share price rallied 1.21 percent to 2,001 pence in morning deals on London's FTSE 100 index of top shares, which was 1.03 percent higher at 5,704.07 points.
"This is an excellent set of results and operational measures," said oil sector analyst Peter Hutton at NCB Stockbrokers in London.
He added that the results were "reflecting strong volume growth and cost improvements in the upstream and improved performance and recovery in the downstream ... it more than delivers on the expectation of momentum".
Shell also said Thursday that net profits had fallen by 21 percent in the third quarter, when compared with the previous three months.
Voser added: "We are making good progress on implementing our strategy, with a focus on performance improvement, delivering a new wave of growth, and maturing the next generation of growth options for shareholders, with achievements in all of these themes during the quarter."
Royal Dutch Shell is the first major European energy giant to publish its third-quarter results. French group Total will post its latest earnings on Friday, followed by BP next Tuesday.(AFP)
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