Shell profit falls but beats expectations

Royal Dutch Shell's first-quarter profit fell but easily outstripped expectations as stronger trading and higher gas prices helped make up for lower oil prices.

The FTSE 100 oil company's earnings on a current cost of supplies basis fell to $5.4bn from $5.8bn a year earlier in the three months to the end of March. Analysts had on average expected earnings of $4.5bn.

Shell said the earnings fall reflected lower chemicals and refining margins, oil prices and tax credits, partly offset by stronger trading results and higher gas and liquefied natural gas prices. The biggest impact on profit was at the downstream business, which includes refining, where earnings fell to $1.8bn from $2.1bn. Integrated gas earnings rose to $2.57bn from $2.36bn.

Shell's chief executive Ben van Beurden said: “Shell has made a strong start to 2019. 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.”

Underlying cash flow from operating activities rose to $11.3bn from $10.4bn. Shell said it had launched the latest phase of its share buyback programme and would purchase up to $2.75bn of shares by 29 July.