Shell profit soars to $23bn in 2018

Shell tanker

Shell tanker

Royal Dutch Shell Plc is pumping out a torrent of cash, delivering the payoff that was promised to investors after the company's biggest-ever acquisition three years ago. The average price which Shell charged for a barrel of oil increased 31 per cent in 2018 to $71, with overall liquids - including liquid natural gas - rising 30 per cent to almost $64.

"The cash flow is incredible", said Rob West, analyst at Redburn. The firm has a market capitalization of $245.44 billion, a PE ratio of 15.46, a price-to-earnings-growth ratio of 1.40 and a beta of 0.89.

Uhl insisted that Shell can achieve growth, complete its $25 billion buyback and distribute dividends at $60 oil.

Chief executive Ben van Beurden said: "Shell delivered a very strong financial performance in 2018".

"We will continue with a strong delivery focus in 2019, with a disciplined approach to capital investment and growing both our cash flow and returns". American competitors Exxon Mobil and Chevron publish their 2018 results on Friday.

Its fourth-quarter profits rose 32 per cent to $5.7bn despite a recent cooling in the cost of crude, with higher gas prices helping to buoy the result.

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The oil and gas company posted underlying earnings of £16.3bn for 2018, and Q4 profits up to £4.3bn.

Cash flow from operations, a crucial measure of the sustainability of spending, was $22 billion in the fourth quarter, three times the level a year earlier. That compared with a company-provided analysts' consensus forecast of $5.3 billion.

The group's oil and gas production for the year rose slightly to 3.666mln barrels of oil equivalent per day as new fields that came online offset the effect of disposals. Barclays reiterated an "overweight" rating on shares of Royal Dutch Shell in a research report on Monday, October 8th.

Citywire quoted Interactive Investor analyst Richard Hunter as commenting yesterday that Shell had reported a 34-percent rise in earnings per share over the year after disposal of non-core assets and "prodigious cash generation enabled the maintenance of the dividend". On Thursday, it launched the next tranche of $2.5 billion until the end of April, it said.

Shell is the world's largest oil trader, buying an selling over 10 million barrels a day. "It's important for you to understand the nature of Shell, the nature of our cash flows, which aren't necessarily dependent on excessive levels of capital investment".

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