Shell hikes its dividend as gas helps earnings

Marion Dakers
ENERGY giant Shell yesterday lifted its dividend after stronger earnings from gas kept profits from falling as much as expected.

Shell, whose new chief executive Ben van Beurden started in the job with a profit warning in January, said yesterday that adjusted earnings fell three per cent to $7.33bn (£4.34bn), beating consensus estimates by 51 per cent.

However, the figure strips out $2.9bn of one-off writedowns, mainly related to refineries in Asia and Europe as refining margins remain tough.

Earnings from upstream activities, which include new production in the Gulf of Mexico and Iraq, rose 1.1 per cent to $5.7bn, despite a slight dip in overall output.

Shell said its integrated gas business had performed particularly well, following the purchase of Repsol’s liquefied natural gas assets last year.

Cash flow soared 21 per cent to almost $14bn, enabling the firm to increase its shareholder payout by four per cent to $0.47.

The firm expects to sell off $15bn-worth of assets in the coming year to allow for further dividend increases alongside improving profits.

Shell first-quarter earnings, on a current cost of supplies basis, were $4.5bn compared with $8bn a year ago.

“The impairments we have announced today in downstream reflect Shell’s updated views on the outlook for refining margins,” van Beurden said.

“There are substantial pressures on the industry from excess capacity, changing product demand, and new oil supplies from liquids-rich shales.”