Royal Dutch Shell Triples Profits on Refining and Chemicals

Royal Dutch Shell $RDS.A reported strong second quarter results Thursday, tripling profits before the market opened. Shell leads off big oil earnings with Exxon Mobil and Chevron tomorrow.

Royal Dutch Shell $RDS.A more than tripled its profits in the second quarter beating analysts forecasts boosted by strong refining operations, chemicals  and a rise in oil prices.  Shell reported a huge cash flow improvement to $12.2 billion as debt dropped, selling off $25 billion of assets since acquiring BG Group last year. Oil and gas production fell off versus the previous quarter with reduced output from a facility in Qatar. 

Earnings: Net income based on a current cost of supplies (CCS) and excluding exceptional items, rose 245% $3.6 billion beating analyst consensus of $3.15 billion. 

Reaction: Royal Dutch Shell plc (ADR) ADR Class A NYSE: RDS.A – Jul 27 Open 55.24 +0.72 (+ 1.32%)

Cash flow from operating activities for the second quarter 2017 of $11.3 billion included favorable working capital movements of $2.3 billion, compared with $2.3 billion in the second quarter 2016, which included negative working capital movements of $2.5 billion. Cash flow in the first half of the year rose seven fold to $20.8 billion from a year earlier.

Oil and gas production in the second quarter declined to 3.495 million barrels of oil equivalent per day (boed) from 3.752 million boed in the first quarter. Shell expects a 240,000 barrel-per-day year-on-year fall in third-quarter production due to divestments in Malaysia and Australia and the separation of its Motiva asset in the United States.

Shell debt is now at $78 billion, Its debt to equity ratio fell for a second consecutive quarter to 25.3 percent from a peak of 29.2 percent in the third quarter of 2016 that followed its $54 billion acquisition of BG Group.

Source: Royal Dutch Shell

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