Shell's second quarter net profit rises to $1.9 billion

Royal Dutch Shell Plc on Thursday said its second-quarter net profit (after tax and after exceptional items) rose to $1.9 billion as cash generation increased sharply in the quarter, indicating the company is continuing to adapt to lower oil prices.

Shell, Europe's largest oil firm, saw its second quarter net profit (on a current cost of supplies (CCS) basis) rise 245 per cent to $3.6 billion against $1 billion for the second quarter of 2016.

Revenue for the quarter stood at $72.13 billion while cash flow from operations rose to $11.3 billion from $9.5 billion in the preceding quarter.

Gearing expenses dropped to 25.3 per cent, while net debt fell for a third straight quarter to $66.4 billion from $72 billion in March as the company sold assets from Canada to Australia as part of its $30 billion divestment programme.

Adjusted downstream profit was $2.53 billion compared with $1.82 billion a year earlier.

Adjusted upstream profit was $339 million compared with a $1.3 billion loss a year earlier.

Total oil and gas production was little changed at 3.5 million barrels of oil equivalent a day.

The improved performance was due mainly to higher contributions from downstream (the refining of petroleum crude oil) especially the stronger chemicals and refining industry conditions.

Upstream (oil exploration) also supported the results with higher prices and production in new fields, the company said.

Royal Dutch Shell chief executive officer Ben van Beurden commented: ''Shell's strong results this quarter show that we are reshaping the company following the integration of BG.

''Cash generation has been resilient over four consecutive quarters, at an average oil price of just under $50 per barrel. This quarter, we generated robust earnings excluding identified items of $3.6 billion, while over the past 12 months cash flow from operations of $38 billion has covered our cash dividend and reduced gearing to 25 per cent.

''The external price environment and energy sector developments mean we will remain very disciplined, with an absolute focus on the four levers within our control, namely capital efficiency, costs, new project delivery, and divestments.

''I am confident that we are on track to deliver a world-class investment to our shareholders.''

Exxon Mobil Corp and Chevron Corp are scheduled to announce results on 28 July and BP Plc on ` August.