Royal Dutch Shell beats market forecasts with financial results

published 31 January 2013

Royal Dutch Shell exceeded market forecasts Thursday as the oil and gas company unveiled fourth quarter and full-year results.

The FTSE 100 group said earnings for the last three months of 2012 were $7.3bn, compared to $6.5bn the previous year. Annual net income last year was up $27bn from $28.6bn in 2011.

The company beat analysts' expectations including Charles Stanley which projected a net income of $6.2bn for the quarter and $25.7bn for the year.

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Fourth quarter carbon capture and storage (CCS) earnings, excluding identified items, rose 15% year-on-year to $5.6bn while full year CCS earnings increased 2.0% to $25.1bn.

Cash flow from operating activities was $9.9bn in the fourth quarter and $46.1bn for the full year.

Dividend for the fourth quarter was $0.43 per ordinary share and $0.86 per American Depositary Share (ADS), a year-on-year increase of 2.4%.

Shell said dividend for the first quarter of 2013 is expected to be $0.45 per share and $0.90 per ADS, an increase of 4.7% compared with the first quarter of 2012.

Results were driven by expansion plans, acquisitions and increased operations worldwide.

During the fourth quarter Shell grew business in Australia after completing the acquisition of Chevron's 16.7% stake in East Browse and 20% interest in West Browse in exchange for Shell's 33.3% holding in Clio-Acme and cash.

Also in Australia, Shell acquired an additional 2.0% interest in the Crux gas and condensate field from Nexus Energy, increasing Shell's interest to 82%.

In Malaysia, Shell took the final investment decision for the development of the deep-water oil field Malikai, which is expected to produce some 60,000 barrels of oil equivalent per day (boe/d) at peak production.

In the UK, Shell purchased 75% of Hess Corporation's interests in the Beryl area fields and SAGE infrastructure, lifting production from 9,000 boe/d to 20 thousand boe/d.

"With the first year of our 2012-2015 growth targets completed, Shell is on

track for plans we set out in early 2012, despite headwinds last year," Royal Dutch Shell Chief Executive Officer, Peter Voser, said.

"Shell is competitive and innovative. We are delivering a strategy that others can't easily repeat, with unique skills in technology and integration and a worldwide set of opportunities for new investment."