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Shell Q1-2014 Profit Slumps 44% On Refining

|Includes:Royal Dutch Shell plc (RDS.A)

Shell reported a 44% YoY fall in Q1-2014 net profit to $4.5 billion. The fall was attributed to a $2.9 billion charge reflecting impairments related to refineries in Asia and Europe.

Profit from upstream activities remained flat at $5.7 billion, supported by stronger integrated gas results as well as higher gas realizations. However, this was offset by the impact of exploration well write-offs, and higher costs and depreciation.

Profit from downstream activities stood at $1.6 billion, down by 15% YoY, impacted by lower industry refining margins and trading results.

Q1-2014 financial highlights

· Revenue of $112 billion, down 3% YoY

· Capex of $7.4 billion, down 6% YoY; upstream capex up 27% YoY to $9.3 billion

· Divestment proceeds of $500 million

Q1-2014 operational highlights

· Production at 3.2 MMBOE/d (46% liquids), down 9% YoY; mainly due to divestments, license expiries and security issues in Nigeria

· Liquids production at 1.5 MMBOE/d, down 10% YoY, mainly due to lower production from Nigeria

· Gas production at 10.2 MMcf/d, down 8% YoY

In Jan-2014, Shell reported a 38% YoY fall in 2013 net profit to $16.7 billion.

In May-2013, Shell reported a 4% rise in net profit to $8 billion as downstream profits grew 28% YoY.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: RDS.A