Shells profit

Shell Struggles in Q3 Amid 'Volatile' Energy Markets

Shell's adjusted net profit, a key measure stripping out changes in the value of inventories and other non-operating items, fell by 6% to $6.6 billion in the three months to September year-over-year.

Royal Dutch Shell PLC (IW 1000/1) reported on Thursday a 2% rise in net profit to $7.1 billion in the third quarter, saying it faces "volatile energy markets."

Shell added that adjusted net profit, a key measure stripping out changes in the value of inventories and other non-operating items, fell by 6% to $6.6 billion in the three months to September year-over-year.

However, that beat market expectations for profit of $6.3 billion, according to analysts polled by Dow Jones Newswires.

Group revenue meanwhile declined by 8.4% to $115.4 billion in the reporting period.

"Shell is driving a long-term and consistent strategy, against a backdrop of volatile energy markets," said CEO Peter Voser in the earnings release.

"Our earnings were driven by lower oil and gas prices, and lower chemicals margins, which offset the benefits of our operating performance, underlying growth in oil and gas production, and higher results in integrated gas and oil products."

He added: "I am pleased with our progress in a difficult industry environment."

Total production fell by 1% to 2.98 million barrels of oil equivalent per day in the third quarter.

But stripping out the impact of asset sales, security problems in Nigeria and other one-off factors, underlying production was 1% higher.

Shell's net-profit figure included the impact of a $1 billion gain on the value of inventories and a $432 million impairment, mainly on natural gas assets in the United States and tax changes in Britain.

"Shell is continuing to generate substantial cash flows and we expect the priority to be re-investment, but the company could afford a more generous dividend if it chose to," said Investec analyst Stuart Joyner.

Earlier this week, rival energy group BP PLC (IW 1000/4) revealed that net profits jumped 7.7% to $5.43 billion in the third quarter, as it was boosted by a strong performance in its downstream business.

French oil group Total SA (IW 1000/9) on Wednesday reported a 7% fall in net third-quarter profit, but its key adjusted figure excluding changes in inventory values soared by 20% to $4.4 billion.

Copyright Agence France-Presse, 2012

By Roland Jackson

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish