By David Hodari 
 

Oil giant Royal Dutch Shell PLC (RDSA.LN) released its third quarter earnings on Thursday, with natural gas bolstering the company's profits despite weak energy prices. Still, adjusted profits missed expectations and shares were down on Thursday morning. Here are some more remarks from the report:

On profits:

"Compared with the third quarter 2018, [Current Cost of Supply] earnings attributable to shareholders excluding identified items were $4.8 billion, reflecting lower realised oil, LNG and gas prices, as well as weaker realised refining and chemicals margins. This was partly offset by significantly stronger contributions from LNG and oil products trading and optimisation as well as higher realised margins in retail and global commercial."

On earnings environment, buybacks, and debt:

"Our earnings reflect the resilience of our market-facing businesses and their ability to capitalise on market conditions, including very strong trading and optimisation results this quarter. Our intention to buy back $25 billion in shares and reduce net debt remains unchanged. The prevailing weak macroeconomic conditions and challenging outlook inevitably create uncertainty about the pace of reducing gearing to 25% and completing the share buyback programme within the 2020 timeframe."

On gas:

"Compared with the third quarter 2018, Integrated Gas earnings… primarily reflected significantly stronger contributions from LNG trading and optimisation as well as higher volumes, partly offset by lower realised LNG, oil and gas prices… production increased mainly due to field ramp-ups in Australia and Trinidad and Tobago. LNG liquefaction volumes increased mainly as a result of new LNG capacity from the Prelude floating LNG facility as well as increased feedgas availability compared with the third quarter 2018... cash flow from operating activities… reflected higher earnings, partly offset by increased cash outflows related to commodity derivatives."

On upstream:

Compared with the third quarter 2018, Upstream earnings...reflected lower realised oil, gas and NGL prices, well write-offs in Kazakhstan as well as lower gas production. These were partly offset by lower provisions, as well as positive movements in deferred tax positions in contrast with the same period a year ago.

On downstream:

"Compared with the third quarter 2018, Downstream earnings excluding identified items benefited from stronger contributions from oil products trading and optimisation and higher retail and global commercial margins. These were partly offset by lower realised refining, base chemicals and intermediates margins."

 

Write to David Hodari at david.hodari@wsj.com

 

(END) Dow Jones Newswires

October 31, 2019 06:25 ET (10:25 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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