Shell Doubles Annual Earnings

Global oil giant Royal Dutch Shell has posted a “strong financial performance” for its full year with earnings more than doubling due to the surging cost of crude.

Annual net income rose to $15.8 billion for the full year 2017, up 119% from $7.2 billion the year before.

These earnings benefited mainly from higher prices of realised oil, gas and liquefied natural gas (LNG), improved refining performance and higher production from new fields, which offset the impact of field declines and divestments, according to Shell.

Full year 2017 cash flow from operating activities was $35.7 billion, which included negative working capital movements of $3.2 billion.

Fourth Quarter Earnings

Fourth quarter earnings were $4.3 billion, up 140% from $1.8 billion the year before. Cash flow for that period was $7.3 billion, which included negative working capital movements of $1.1 billion. Excluding working capital effects, cash flow from operations was $8.4 billion.

Total dividends distributed to shareholders in the quarter were $3.9 billion, of which $1.6 billion were settled by issuing 52.7 million A shares under the Scrip Dividend Programme, according to the oil company.

In November, Shell announced the cancellation of the Scrip Dividend Programme from the fourth quarter 2017. Shell expects to announce a dividend of $0.47 per ordinary share and $0.94 per American Depositary Share for the first quarter 2018.

'Year Of Transformation'

“2017 was a year of strong financial performance for Shell,” said Ben van Beurden, CEO of Shell. “A year of transformation, in which we showed we have what it takes to deliver a world-class investment case. Our relentless focus on value, performance and competitiveness meant we were able to deliver $39 billion of cash flow from operations excluding working capital movements from our upgraded portfolio.”

“We strengthened our financial framework during the year through an $8 billion reduction in our net debt, while our increased free cash flow generation gave us the confidence to cancel the scrip dividend programme in the fourth quarter, in line with what we said previously,” van Beurden continued.

“We reported strong earnings for the quarter underpinned by continued delivery momentum. Cash flow reflected higher tax payments and increased cash requirements in relation to our trading business. We enter 2018 with continued discipline and confidence, committed to the delivery of strong returns and cash.”