Shell 3Q net profit rebounds to US$1.4 billion, targets lower 2017 spending

November 01, 2016 | Company Operations, Earnings Reports

London, UK | – Multinational energy supermajor Royal Dutch Shell announced on Tuesday  that it rebounded into the black in the third quarter, aided by rising output and cost-cutting after its takeover of BG Group.

Earnings after taxation hit US$1.4 billion (€1.3 billion) in the three months to September, against a net loss of US$7.4 billion last year, which was skewed by vast write-downs after the scrapping projects in Alaska and Canada.

Chief Executive Ben van Beurden cautioned however that ultra-low oil prices continued to represent a “significant challenge”.

Profit adjusted for exceptional items and the changing value of oil inventories advanced to US$2.79 billion in the third quarter, from US$2.38 billion a year earlier.

That beat market expectations of US$1.79 billion, according analysts polled by Bloomberg.

“Shell delivered better results this quarter, reflecting strong operational and cost performance,” added van Beurden in the results statement. “But lower oil prices continue to be a significant challenge across the business, and the outlook remains uncertain.”

Back in February, Shell completed a £47-billion takeover of BG Group, in a deal aimed at strengthening its position in the liquefied natural gas (LNG) market.

“The integration of Shell and BG is now essentially done and has been completed well ahead of plan,” noted van Beurden.

“It’s been an important catalyst for the significant and lasting changes we are making to the company’s working practices, cost structure and portfolio.”