By Ron Bousso
LONDON (Reuters) – Royal Dutch Shell’s profits jumped by more than a third in 2018 to $21.4 billion, the highest since 2014, as the oil and gas producer vowed to stick to spending discipline.
The Anglo-Dutch company also reported a sharp rise in cash generation, in a further sign that cost savings since the 2014 downturn are filtering into its operations.
“We delivered on our promises for the year, including the completion of the $30 billion divestment program and starting up key growth projects while maintaining discipline on capital investment,” Chief Executive Officer Ben van Beurden said in a statement.
“We will continue with a strong delivery focus in 2019, with a disciplined approach to capital investment and growing both our cash flow and returns,” he added.
Shell’s 2018 profits rose 36 percent to $21.4 billion, beating the $20.98 billion in a company-provided forecast.
In the fourth quarter net income attributable to shareholders, based on a current cost of supplies (CCS) and excluding identified items, rose 32 percent to $5.69 billion as cost cuts filtered through.
That topped a company-provided forecast of $5.28 billion for the quarter.
Oil and gas production in the year rose slightly to 3.666 million barrels of oil equivalent per day as new fields that came online offset the effect of disposals.
Shell’s cash flow from operations in the fourth quarter rose to $22 billion, boosted by a $9 billion working capital movement, which brought the annual figure to $53 billion.
Free cash flow — cash available to pay for dividends and share buybacks — rose to $39.4 billion from $27.6 billion in 2017.
(Reporting by Ron Bousso; editing by Susan Fenton and Jason Neely)