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Profit of Royal Dutch Shell rose more than twice in 2017

Royal Dutch Shell

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The profit of Royal Dutch Shell rose more than twice in 2017 to 16 billion USD, which is the highest value since 2014. The growth is mainly due to rising oil and gas prices as well as increased production and better overall performance. The Anglo-Dutch company indicated that last year they also increased cash inflows thanks to years of spending cut policy and the integration of BG Group, which was acquired by Shell in 2016.
The European Brent oil has continued to recover its price and in recent months has reached a three-year high of about 70 USD per barrel, which supported the revenues of the
The oil and gas production has grown in the fourth quarter to 3.756 million barrels of oil equivalent per day from 3.657 million in the previous three months. On an annual basis, however, production declined by 4%.
On a quarterly basis, Shell’s profit based on the current raw material price, with no one-off effects, rose by 140% to 4.3 billion USD, which is slightly above analyst expectations of 4.24 billion USD.
Over the past three months, Royal Dutch Shell has also terminated the practice of paying dividends where investors can choose how to get them – in the form of shares or money. This is a sign of Shell’s confidence that it can guarantee 15 billion USD in dividend payments per year. The company also reported that the debt-to-equity ratio fell to 24.8% of its peak in the third quarter of 2016 when it was 29.2% thanks to a debt reduction of 74.65 billion USD.
Shell also reported a 2 billion USD one-time expense due to the new US tax reform, but it is expected that it will boost revenue in the long run.