LONDON: Anglo-Dutch oil giant Shell turned in a 60-percent net profit leap for the first quarter on Thursday, benefiting from resurgent oil prices and the sale of non-core assets.
Earnings after tax rallied to $8.78 billion (six billion euros) in the three months to March, up from $5.48 billion a year earlier, the company said in a results statement. Sales rose 28 percent to almost $110 billion.
"Our first quarter 2011 earnings have risen from year-ago levels, driven by higher industry margins and our own operating performance," chief executive Peter Voser said in the earnings release.
"We continue to make good progress in implementing our strategy; improving near-term performance, delivering a new wave of production growth, and maturing the next generation of growth options for shareholders."
Adjusted net profits, stripping out movements in the value of inventories and other non-operating items, jumped to $6.29 billion, compared with $4.82 billion last time around.
Market expectations had been for a figure of about $6.11 billion, according to analysts polled by Dow Jones Newswires.
"We have announced new asset sales and cost savings programmes, as part of Shell's focus on continuous improvement, to enhance our profitability and performance," added Voser.
Shell sold $3.2 billion of non-core positions, including tight gas assets in South Texas, in the quarter.
Total oil and gas production meanwhile, declined by 2.5 percent to 3.504 million barrels of oil equivalent per day in the reporting period.
In reaction, Shell's 'B' shares rose by a modest 0.41 percent to 2,326.50 pence in midday trade, but London's FTSE 100 index slid into negative territory ahead of Friday's public holiday to mark Britain's royal wedding.
The results were published one day after rival BP revealed that its first-quarter net profits leapt 17 percent to $7.124 billion – but it also revised upward the cost of last year's fatal Gulf oil spill disaster.
"In the battle of the UK super-majors, the first leg of 2011 belongs to Shell by a considerable margin," said Richard Hunter, equities head at Hargreaves Lansdown Stockbrokers.
"Whereas BP has had to reorganise its business model and turn its attention to the ongoing fallout from the Gulf of Mexico spill, Shell has continued to power ahead unabated."
He added: "The company's longer term plans, including the disposal of non-core operations and additional focus on continuous improvement, give Shell a focus which should further underpin its position."
The energy sector has reaped major benefits from the soaring cost of crude oil in recent months.
World oil prices surged in the first three months of this year, boosted by simmering tensions and violent unrest in the crude-producing Middle East and North Africa region.
However, the market remains significantly below record high prices of above $147 per barrel which were reached in July 2008.
Comments
Comments are closed for this article.