January’s profit warning took the sting out of Royal Dutch Shell’s (RDSB) full-year results, so despite confirmation of a woeful fourth-quarter performance, the group’s share price ticked-up on news that this year’s first-quarter dividend rate had been increased by 4 per cent.
Ostensibly good news, but as Shell’s distributions are not currently covered by free cash-flow, it means that the group will need to make haste on its planned $15bn (£9bn) divestment programme, or net debt will continue to rise to meet the shortfall. This is hardly the ideal scenario for new executive Ben van Beurden, who has already signalled that efficient capital allocation will be the primary focus during the opening phase of his tenure.
$631m in net impairments linked to US shale assets contributed to a 71 per cent decline in comparable fourth-quarter profits - on a current cost of supplies basis (CCS) - to $2.2bn. Full-year CCS profits fell by 38 per cent to $16.7bn, although last year’s figures were flattered by a $1.9bn one-off gain. Nevertheless, the profit contraction reflects a 2 per cent fall-away in output linked to Shell’s ongoing operational problems in Nigeria, together with an additional $9.1bn in exploration and depreciation charges compared with the prior year.
| ROYAL DUTCH SHELL (RDSB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,278p | MARKET VALUE: | $141bn* | |
| TOUCH: | 2,278-2,279p | 12-MONTH HIGH: | 2,375p | LOW: 2,070p |
| DIVIDEND YIELD: | 4.8% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 2,830¢* | NET DEBT: | 19% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 278 | 12.7 | 204 | 168 |
| 2010 | 368 | 35.3 | 328 | 168 |
| 2011 | 470 | 55.7 | 498 | 168 |
| 2012 | 467 | 50.5 | 427 | 172 |
| 2013 | 451 | 33.6 | 260 | 180 |
| % change | -3 | -33 | -39 | +5 |
Ex-div: 12 Feb Payment: 27 Mar *Reflects both 'A' and 'B' shares. £1 = $1.66 | ||||
