Shell's Gas Gambit Succeeds, Though Adjusted Profits Miss Expectations -- Commodity Comment
31 Octubre 2019 - 04:40AM
Noticias Dow Jones
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)
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