Shell’s good performance allows it to pay dividends and reduce debt
Shell is the latest in a string of major oil companies to report better-than-expected results with strong cash flow
London — Royal Dutch Shell has shown that it has adapted to a world of lower oil prices, generating a surge in cash flow that allowed it to pay dividends while reducing debt. The Anglo-Dutch company’s performance helps validate CEO Ben Van Beurden’s $54bn purchase of BG Group — for which some shareholders complained he overpaid — and the deep spending cuts and asset sales he undertook to protect the balance sheet. "With new projects starting and higher-cost assets being sold, you’d expect cash generation to only increase," said Iain Armstrong, an analyst at Brewin Dolphin, which owns Shell shares. "It’s becoming a cash-generating machine." Cash flow from operations surged more than tenfold to $9.51bn in the first quarter, Shell said in a statement. After taking out the cost of investments, free cash flow of $5.18bn covered the cash portion of the company’s dividend for a third consecutive quarter.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.