Shell boosts half year profits by 200% on back of rising crude oil price – but production remained flat

Analyst David Barclay, Head Brewin Dolphin Aberdeen, commented: “On the face of it, this was a positive set of results from Shell – the rising oil price has helped the company boost pre-tax profits 200% year-on-year to £13.6 billion, on revenues of £143 billion.

“While production remaining flat will be a concern, Shell continues with its plans to divest £22.5 billion of assets as it looks to cut its gearing, which is down to 23.6% from more than 25% during the same period last year.

“The £19 billion scrip share buy-back scheme is some good news for investors, which will turn stock issued during the oil price downturn into cash. However, the market was clearly lukewarm on news of Shell’s progress, with shares down around 2% in early trading.”

Shell chief executive Ben van Beurden said: “Today we took another important step towards the delivery of our world-class investment case, with the launch of a $25 billion share buyback programme.

“This move complements the progress we have made since the completion of the BG acquisition in 2016, to reshape our portfolio through a $30 billion divestment programme and new projects, to reduce net debt, and turn off the scrip dividend.

“Our financial framework remains unchanged. Our free cashflow outlook and the progress we have made to strengthen our balance sheet give us confidence to start our share buyback programme.”

Shell half year results 2018
Shell half year results 2018

27 Jul 2018

 

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