Shell Profit Soars on Oil Recovery -- Update

By Sarah Kent 

LONDON -- Royal Dutch Shell PLC on Thursday reported its highest quarterly profit since 2013, as higher oil prices and years of cost cutting boosted earnings.

The Anglo-Dutch oil giant said its first-quarter profit on a current cost-of-supplies basis -- a number similar to the net income that U.S. oil companies report -- rose 69% from a year earlier to $5.7 billion.

The company delivered more than $5 billion in free cash flow -- a newly important metric for investors concerned about big oil companies' ability to finance their dividends after the oil price collapsed in 2014.

In other signs of an improving financial outlook, Shell said it had completed $26 billion of its $30 billion divestment program, which began in 2016 to help pay down debt taken on during the company's $50 billion acquisition of BG Group. The company said it is on track to buy back at least $25 billion worth of shares by 2020, but gave no indication when the previously flagged program would begin.

Shell is the biggest oil company yet to report results for the quarter -- a period where the industry has everything to prove. After years of retrenchment, investors are expecting companies to deliver billions of dollars in free cash flow, buoyed by rising oil prices and stringent cost cuts.

Exxon Mobil Corp. and Chevron Corp. are due to publish their first-quarter results Friday. BP PLC reports on May 1.

Write to Sarah Kent at [e-mail]

(END) Dow Jones Newswires

April 26, 2018 02:57 ET (06:57 GMT)

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