Seeking Alpha

Shell confirms profit slump; targets $15B of asset sales

  • Shell's (RDS.A, RDS.B) Q4 net-profit equivalent slumped 71% to $2.2B, hurt by higher depreciation, increased exploration expenses, lower upstream volumes and weak industry conditions in downstream oil products.
  • As the company warned almost two weeks ago, earnings on a current cost of supplies basis plummeted to $2.9B from $5.6B a year earlier.
  • Revenue dropped to $109.24B from $116.51B. (Earnings PR)
  • The company plans to cut capex to $37B in 2014 from $46B in 2013 and is scrapping its troubled exploration program in Alaska.
  • Shell also intends to sell $15B worth of assets this year and next as it looks to increase the rate of divestments. (Strategy PR)
  • The firm has proposed raising its Q1 dividend by 4% to $0.47 per share (Dividend PR).
Comments (7)
  • Profits plummet 71%, revenues fall and capex cut yet dividends are raised. Althoughh pleased with that decision, is this the corporate worlds equivalent to bribing the stock market and shareholders, given the impact on share price today?
    30 Jan, 04:52 AM Reply Like
  • Shell is by far the worst of the major integrated oil stocks.
    30 Jan, 05:32 AM Reply Like
  • Shell's 2013 increase in spending was largely because of certain major acquisitions; Repsol’s LNG assets $6.7 billion, a $1.4 billion signature bonus for Libra, and because of delayed divestments.

     

    $130 billion CapEx in four years, two years and $55 billion left, with $15 billion of divestments targeted. Shell is sitting on a pipeline of big projects, investing heavily, with that comes big increases in CF.

     

    Precisely why there wasn't any drop in share price. This business is long term, big picture..
    30 Jan, 08:02 AM Reply Like
  • I tend to agree.
    Neither selling nor adding, I'm holding RDS.
    30 Jan, 03:00 PM Reply Like
  • If Shell cannot succeed as an integrated Major then perhaps it should split itself into two or three more focused companies, including an LNG pure play with global reach.
    30 Jan, 07:51 AM Reply Like
  • Perhaps if this new CEO can't turn things around, they will do that. They shouldn't be floundering with the kind of assets they have.
    1 Feb, 03:20 AM Reply Like
  • for the last 6 months CEO Management reports and performance are pretty dismal, under Peter Vosser and his successor, Q3 and Q4 are pretty bad news, this management seems not to be in control of the company, so, the stock price should have dropped, the div increase - is this self- delusion ? buy off the market ??

     

    something got to give

     

    Frankfurt Germany
    30 Jan, 10:26 AM Reply Like
DJIA (DIA) S&P 500 (SPY)