Shell Expected To Announce Rise In Profits

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This week, Royal Dutch Shell, the Oil giant, is set to announce rising annual profits. It comes even though the fourth quarter results of the company is anticipated to be affected by a drop in the oil prices at the end of the previous year.

The company is set to reveal its highest annual profits for four years next week.

According to an analysis from S&P Global, the net income of the company is expected to increase by 34 percent to $21.1 billion (£15.9 billion) in the full year to the end of December 2018, a rise from the $15.7bn that was recorded during the previous year.

However, the net profit of the company is expected to drop from $5.6 billion in the third quarter to $5.39 billion in the three months to the end of December because of falling oil prices at the end of the previous year.

After it was able to rebound steadily since 2016 following a long and painful rout, the crude price rally finally ran out of steam last autumn amid the fears of a slowdown in demand as the global growth eases, combined with increasing inventories.

The most recent results come after Shell reported one of its “strongest ever quarters” in November last year after it realised the benefits of higher prices for both oil and gas.

Analysts at The Share Centre stated: “The oil major has been reporting great numbers as average oil prices made steady progress since the lows of 2016.”

The added: “However, given the anticipation of higher supplies from shale and Iranian oil supplies not expecting to fall back as dramatically as previously expected, oil prices during the final quarter wobbled which will no doubt hit Shell’s numbers.”

The continued: “Investors though will still expect solid free cash flows and hope that gearing level shave down a little further.”

The analysts noted: “For 2018 as a whole revenues and profits should easily breach previous highs set back in 2013 especially since costs have been cut back dramatically.”