Shell shock: Earnings boost for Royal Dutch

03-05-2007

Shell shock: Earnings boost for Royal Dutch
Analysts have expressed surprise at Royal Dutch Shell's first-quarter profits of $6.9 billion (£3.5 billion).

The energy giant's strong current cost of supply profit, up six per cent on the first quarter of 2006, meant it was able to increase its share dividend by 14 per cent.

Shell managed to boost its oil earnings after improvements to its refinery profitability, where higher costs were offset by lower refinery utilisation in the first quarter of 2006.

Gas and power earnings rose from $760 million (£381 million) to $803 million (£403 million) while cash flow from operating activities increased to $11.2 billion (£15.2 billion) from $7.8 billion (£10.6 billion) last year.

Royal Dutch Shell chief executive Jeroen van der Veer, said his company's strategy was "on track".

"These are again competitive results, driven by operating performance," Mr van der Veer commented.

"We have progressed two large and complex transactions, Sakhalin II and Shell Canada, which consolidate our position in two major resources areas. We continue to refocus our portfolio, through disciplined capital choices."

Shares in Shell rose by 2.16 per cent on early morning trading, reflecting the stronger-than-expected performance of the company's earnings. Industry experts had forecast first-quarter earnings of nearer $5.7 billion (£2.9 billion).


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