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Shell posts 2% fall in Q1 profit on lower oil prices

Thursday, 2nd May 2019
Royal Dutch Shell posted a 2% decline in first-quarter profits as strong contributions from trading and higher LNG and gas prices were unable to completely offset the impact of lower realised oil prices and tax credits.

Net income attributable to shareholders, based on current cost of supplies (CCS) and excluding identified items, fell 2% year on year to $5.301bn.

Oil products' refining and trading profit jumped 143% year on year to $343m.

However, Royal Dutch Shell CEO Ben van Burden remained confident: "Our integrated value chain enabled our Downstream business to deliver robust results despite challenging market conditions. The consistent financial performance across all our businesses provides confidence in meeting our 2020 outlook."

Looking forward to the second quarter, Integrated Gas production is expected to be 10-50 thousand boe/d lower than the second quarter of 2018, mainly as a result of divestments and the transfer of the Salym asset into the Upstream segment, partly offset by new field ramp-ups and lower maintenance activities. LNG liquefaction volumes were expected to be at a similar level as in the second quarter 2018.

Compared with the second quarter of 2018, Upstream production was expected to be higher by some 150-200 thousand boe/d, mainly due to new field ramp-ups and lower maintenance activities. Production was also expected to be positively impacted by the transfer of the Salym asset, which was previously reported in the Integrated Gas segment, partly offset by field decline and divestments.

Refinery availability was expected to increase in the second quarter 2019 compared with the same period a year ago, mainly as a result of lower maintenance activities.

Oil Products sales volumes were expected to decrease by some 40-70 thousand boe/d compared with the same period in 2018, mainly as a result of the divestment in Argentina.

Chemicals manufacturing plant availability was expected to decrease in the second quarter 2019 as a result of higher maintenance activities compared with the second quarter 2018.

Corporate earnings excluding identified items were expected to be a net charge of $650-700m in the second quarter 2019 and a net charge of $2,600-2,800m for the full year 2019, on a post-IFRS 16 basis. This excluded the impact of currency exchange rate effects.

Total dividends distributed to shareholders in the quarter were $3.9bn.

On 2 May, Shell also launched the next tranche of its share buyback programme, with a maximum aggregate consideration of $2.75bn in the period up to and including July 29, 2019. In aggregate, since the launch of the share buyback programme, 215.7 million A ordinary shares were bought back for cancellation for a consideration of $6.75bn.

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