Royal Dutch Shell 3rd qtr results

Royal Dutch Shell a global group of energy and petrochemical companies. I have a holding in my income portfolio (epic code: RDSB)

Royal Dutch Shell announced their third quarter results today with revenue for the third quarter down 7.4% from last year to $107.9bn and for the nine months down 3.9% to $328.7bn, reflecting lower prices and production for oil.

 

Third quarter earnings, on a CCS basis, were $5.3bn an increase of 26.2% and if we exclude identified items of $0.6bn, earnings were $5.8bn an increase of 28.9%.  This improvement was mainly due to better refinery margins in their downstream segment; lower exploration costs and higher margins for upstream production, despite lower volumes.

 

EPS on a CCS basis excluding identified items was $0.92 a 29.6% increase above last year and for the nine months period was $3.06 up 16.3%.  

 

The identified items of $0.6bn in the quarter included impairments, divestment gains and losses and restructuring costs. This follows on from $3.9bn of identified items in the first six months.

On a reported basis for the nine months EPS was $2.26 a reduction of -2.6%.  As expected a second quarter dividend of $0.47 has been declared, an increase of 4.4%.

Free cash flow for the nine months was $11.2bn up from $8.3bn last year and sufficient to cover dividends of $6.5bn and $2.4bn in share repurchases.  Net debt fell from $34.9bn at the year-end to $24bn, principally the result of asset sales and net divestments of interests in JVs and associate holdings totalling a net $10bn.  Gearing at the period end was 13.3%.

The progress on FCF is a positive sign, that highlights the new management's focus on costs and investment returns.  Exxon announce their results tomorrow, so it will be good to how they are performing in this low oil price environment.