Shell earnings slide amid 'weak' macroeconomic conditions

Royal Dutch Shell reported a 15% fall in current cost of supplies (CCS) earnings attributable to shareholders excluding identified items in its third quarter report on Thursday, to $4.8bn (£3.71bn).

The FTSE 100 energy giant said that reflected lower realised oil, LNG and gas prices, as well as weaker realised refining and chemicals margins in the three months ended 30 September.

That was partly offset by “significantly stronger” contributions from LNG and oil products trading and optimisation, as well as higher realised margins in retail and global commercial.

Basic CCS earnings per share, excluding identified items, were down 13% at 59 US cents for the period.

Compared with the third quarter in 2018, Shell said its cash flow from operating activities excluding working capital movements was $12.1bn for the quarter, reflecting lower earnings, higher pension contributions and lower dividends received.

Total dividends distributed to shareholders in the quarter totalled $3.8bn.

Shell also launched the next tranche of its share buyback programme on Thursday, with a maximum aggregate consideration of $2.75bn in the period up to and including 27 January.

Since the launch of the programme, Shell had bought back $12bn in shares for cancellation.

“This quarter we continued to deliver strong cash flow and earnings, despite sustained lower oil and gas prices, and chemicals margins,” said chief executive officer Ben van Beurden.

“Our earnings reflect the resilience of our market-facing businesses and their ability to capitalise on market conditions, including very strong trading and optimisation results this quarter.”

Van Beurden said the board’s intention to buy back $25bn in shares and reduce net debt remained unchanged.

“The prevailing weak macroeconomic conditions and challenging outlook inevitably create uncertainty about the pace of reducing gearing to 25% and completing the share buyback programme within the 2020 timeframe.”

As at 1010 GMT, shares in Royal Dutch Shell were down 3.93% at 2,231.15p.