Shell reports 33% increase in quarterly profit

Thursday 31 July 2014 08.20
Shell is trying to improve profits by being more selective about the projects it undertakes
Shell is trying to improve profits by being more selective about the projects it undertakes

Royal Dutch Shell has reported a 33% increase in quarterly earnings, beating analyst forecasts, after producing more liquids and selling at higher prices.

The Anglo-Dutch oil company, seeking to improve returns, also raised its quarterly dividend and said the value of its share buybacks and dividends for 2014 and 2015 would exceed $30bn.

Shell's second-quarter earnings on a current cost of supplies basis excluding one-time items were $6.1bn, up 33% from a year ago. 

Analysts had expected earnings of $5.46bn on that basis.

The company joins rival BP in reporting better-than-expected earnings. 

Shell chief executive Ben van Beurden is aiming to improve returns through selling assets and more selective project choices after a rare profit warning issued in January.

"Our financial performance for the second quarter of 2014 was more robust than year-ago levels," he said in a statement. "But I want to see stronger, more competitive results right across the company, particularly in Oil Products and North America resources plays."

The earnings included a charge of $1bn after tax, mainly reflecting impairments which were partly offset by divestment gains.

Shell announced a second-quarter 2014 dividend of $0.47 per ordinary share, a 4% increase year-on-year, in line with analyst forecasts.

Global oil companies including Shell have struggled to boost their production in recent years, in part due to declines at existing fields and delays with new projects.

Shell's oil and gas output in the quarter equalled 3.077 million barrels of oil equivalent per day, up from 3.062 million boepd in the same quarter a year ago. Some analysts had expected a decline in output.